All told, the SEC said, the scheme led to the purchase and sale of $80 million in deferred variable annuities between 2007 and 2008, with Horowitz earning $300,000 in commissions and Cohen getting $700,000.
The SEC's settlement with Horowitz is among a growing number in which firms and individuals have admitted to wrongdoing because of a change in the SEC's enforcement policy.
Horowitz's admissions included that he knew his customers would be locked into risky, highly illiquid investment vehicles unless the terminally ill annuities did not die within a matter of months, the SEC said.
The SEC settlement does not disclose the names of the firms where Horowitz worked during the scam. He is not presently licensed. Horowitz most recently worked at Kovack Securities Inc in Beverly Hills, California, for two months, until March of this year.
The brokerage database run by the Financial Industry Regulatory Authority lists Horowitz as being a current registered representative with Kovack Securities Inc.
However, the conduct alleged by the SEC occurred while he was employed with Morgan Stanley, according to both the filing and a March statement to Reuters by Kovack's chief compliance officer.
A Morgan Stanley spokeswoman declined to immediately comment. Morgan is not named in the SEC's action.