The SEC brought an enforcement action against Joel B. Sofia, who was acting as an unregistered investment adviser and receiving management fees from clients. He was previously charged by the CFTC with operating as an associated person of a commodity pool operator without registering. In soliciting advisory clients, Sofia lied about his professional background and experience in the financial industry, falsely guaranteed that clients would not lose money, and deceived clients regarding his purported development and use of proprietary trading software. Convinced clients to provide him with direct access to their brokerage accounts so that he could place trades on their behalf, claiming that there was nothing illegal with giving him such access, while failing to disclose that the broker-dealer at issue did not permit independent advisers to trade in client accounts. Sofia’s trading of options in client accounts resulted in losses of between 61% and 89% of their beginning account balances, totaling more than $1.6 million. The SEC filed charges in the District of New Jersey seeking permanent injunctions and penalties in the litigated case. Engaging in investment advisory activities without registering may mean that a firm is not examined by the SEC but does not preclude a firm from being investigated and held to the fiduciary standard of an investment adviser, particularly when there are indications of fraud and misrepresentations.