EB-5 Operator Caught in Securities Fraud Scam

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Beginning in the spring of 2010 and continuing through 2013, Serofim Muroff and his companies, Blackhawk Manager, LLC and ISR Capital, LLC, sold securities in Blackhawk Gold, LLC and Quartzburg Gold, LLC, to over 280 foreign investors through the EB-5 Program. This program allows foreign investors to petition for U.S. residency after making a qualified investment in a specified job-creating enterprise.

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Help is on its Way: JOBS Act Amendments Adopted by SEC

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On April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act (JOBS Act) into law. This law, which eased many U.S. securities regulations, was created to help encourage funding of small businesses.

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SEC & NASAA Sign Info-Sharing Agreement to Aid Small Businesses

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Last year, in an effort to give companies more flexibility to engage in intrastate offerings through websites and social media without having to register their securities offerings with the federal government, the Securities Exchange Commission (“SEC”) created a new exemption and also amended Regulation D. Combined, these two actions will help facilitate intrastate offerings as well as the development of regional offering exemptions at the state level.

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SEC Provides Guidance for Working with Robo-Advisers

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Robo-advisers are registered financial advisers who use mathematical rules or computer algorithms to provide financial advice or portfolio management online. This recent trend, which requires very little human interaction, has the potential to impact the competitive landscape in the market by offering more affordable access to investment advisory services to retail investors.

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DOL Proposes Delay of Fiduciary Rule

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After six years of planning and intense effort, which included solicitations of input from the industry and investor advocates, the Department of Labor’s (“DOL”) Conflicts of Interest rule was released in April 2016 (the “Final Rule”).  Among other things, the Final Rule required all “advisers” (i.e., individuals or entities who are representatives of a registered investment adviser, bank or similar financial institution, insurance company, or broker-dealer) providing advice regarding retirement accounts act in the best interest of their clients.  Advisers were given until April 10, 2017 to implement the changes required by the Final Rule.

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Investment Adviser and Unregistered Firm Caught Stealing Investor Funds

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On February 2, 2017, the SEC charged Sentinel Growth Fund Management, a Connecticut-based investment advisory business, and its owner with stealing investor money to settle a private lawsuit among other expenditures.

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Are You Considering Breaking Away?

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The number of advisers considering breaking away from a traditional broker-dealer business model is on the rise. According to the latest research from Echelon partners, last year alone, more than 400 teams broke away from their broker-dealers to go independent, with over 15% becoming their own RIAs.1

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