A registered adviser claims exemption for all new business based on institutional clients. Later, the Administrator discovers the adviser has 5% of its client base as retail clients. What is the Administrator’s MOST LIKELY course of action under the USA?

1. ARevoke the adviser’s exemption retroactively to the date retail clients were accepted.
2. BAllow the exemption to continue since most clients are institutional.
3. COrder the adviser to register and may take action for unregistered activity.✓ Correct answer
4. DDo nothing if the adviser was unaware of the non-institutional client mix.

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