An adviser in State K only serves mutual funds, but the Administrator receives information that the adviser is defrauding its clients. What is the Administrator's MOST LIKELY action?

1. ATake enforcement action under anti-fraud provisions, even if registration is not required.✓ Correct answer
2. BTake no action because of the institutional exemption.
3. COrder the adviser to register immediately.
4. DRefer the case to the SEC and take no further action.

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