1. On June 1, 2026, the SEC issued an order increasing the dollar thresholds for determining “qualified clients” under Rule 205-3 of the Investment Advisers Act of 1940, which governs when advisers may charge performance-based fees. Effective June 29, 2026, the asset threshold increases from $1.1 million to $1.4 million, and the net worth threshold increases from $2.2 million to $2.7 million. Advisers must ensure that new clients, private fund investors, and separately managed account clients meet the updated thresholds before entering into advisory agreements or accepting investments on or after that date. Existing clients prior to the effective date generally continue under the previous thresholds, subject to Rule 205-3 transition provisions. Firms are encouraged to review subscription documents, investor questionnaires, advisory agreements, and performance fee policies to reflect the updated thresholds.
2. On May 21, 2026, the SEC and National Futures Association (NFA) entered into a Memorandum of Understanding (MOU) to enhance cooperation, coordination, and information sharing in areas of common regulatory interest. The MOU establishes a framework for sharing information on emerging risks, examination planning, supervisory priorities, financial market conditions, and trends involving jointly regulated or affiliated entities. It allows SEC and NFA staff to meet periodically, exchange data, and leverage their respective expertise while maintaining confidentiality and adhering to applicable laws. The MOU does not create legally binding obligations or confer rights on third parties and preserves each Party’s independence in regulatory and enforcement activities. It includes safeguards for non-public information, restricts access to authorized personnel, and provides procedures for handling legally enforceable requests, unauthorized disclosures, and coordination with other regulators, including the Commodity Futures Trading Commission. The MOU will remain effective unless terminated by either Party with 30 days’ notice and may be revised upon agreement of both Parties. https://www.sec.gov/files/sec-nfa-2026.pdf
3. On May 20, 2026, the United States District Court for the Middle District of Alabama entered a final consent judgment against James Blake Daughtry in connection with the SEC’s enforcement action. Daughtry, a former investment adviser, allegedly breached his fiduciary duties to clients when transferring or recruiting them to Jared Eakes’ advisory firm, GraySail Advisors, LLC, which subsequently misappropriated $2.6 million from those clients. Daughtry failed to monitor client accounts or review investments as promised, enabling Eakes to defraud the clients. Without admitting or denying the allegations, Daughtry consented to a final judgment permanently enjoining him from violating Section 206(2) of the Investment Advisers Act and from associating with any broker, dealer, or investment adviser, and was ordered to pay a $50,000 civil penalty. The SEC’s litigation against Eakes remains pending in the Middle District of Florida. This matter is being litigated. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26557
4. On May 19, 2026, the SEC instituted administrative proceedings against Robert Murray, Jr., the organizer and investment adviser to Deep Dive Strategies, LLC, a private pooled investment fund. Murray, who acted as an unregistered investment adviser, offered and sold securities to approximately 44 investors, most of whom were U.S. Navy active duty service members, reservists, or veterans, raising nearly $355,000. Contrary to his representations that funds would be invested in publicly traded securities, Murray misappropriated a substantial portion of investor funds for personal use, including cash withdrawals and personal expenses. Murray pled guilty to wire fraud and was sentenced to 24 months in prison, followed by three years of supervised release, and ordered to make restitution. The SEC barred Murray. Any application for reentry will be subject to applicable laws and SEC oversight. https://www.sec.gov/files/litigation/admin/2026/ia-6966.pdf
5. On May 19, 2026, it was announced that SEC Commissioner Hester Peirce will leave the agency in late 2026 to join Regent University School of Law as an associate professor. Peirce, known as “Crypto Mom,” became the SEC’s most prominent advocate for cryptocurrency, opposing the agency’s enforcement-heavy approach to digital assets and leading the SEC’s Crypto Task Force to develop a clearer regulatory framework. During her tenure, she guided settlements and dropped enforcement actions against firms including Coinbase, Gemini, Kraken, and Robinhood, and worked to advance innovation exemptions for tokenized securities while embedding crypto expertise within SEC staff. Peirce’s departure marks the end of an eight-year term at the SEC, though the Atkins-led Commission continues to pursue its own regulatory reform agenda. https://www.cryptopolitan.com/crypto-mom-hester-peirce-sec-tenure-ends/
6. On May 14, 2026, the SEC obtained a final judgment against Robert Newell, a fund manager, in connection with the misuse of investor money raised for the stated purpose of investing in the cannabis industry. Newell and Black Hawk Funding, Inc. raised approximately $37 million from more than 200 investors, but investor funds were used for unauthorized purposes, including Ponzi-like payments and expenses of unrelated entities. Newell also misappropriated approximately $668,000 of investor money for his own personal benefit. Newell was also enjoined for five years from participating in the issuance, purchase, offer, or sale of any security, except for transactions in his own personal accounts. Newell was ordered to pay disgorgement in the amount of $668,300, prejudgment interest of $254,067 and a civil money penalty in the amount of $668,300. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26553
7. On May 12, 2026, the SEC charged Reign Financial International, LLC, Reign Financial International, Inc., Giorgio Johnson, Gary Mills, Patrick Allen, Berone Capital, LLC, Jeremiah Beguesse, and Fabian Stone in connection with a fraudulent investment scheme involving purported high-yield investment programs that raised over $26 million from at least 31 investors. Johnson, Mills, and Allen enticed investors with promises of outsized short-term profits with little or no risk, claiming investor funds would be used for financial instruments involving European banks, but the programs did not exist, many investors lost their principal, and no investors received profits. Allen, Reign, Johnson, and Mills misappropriated investor funds, while Berone, Beguesse, and Stone misappropriated hedge fund assets for personal use, including jewelry, luxury cars, and private jet travel. Reign, Johnson, and Mills consented, subject to court approval, to disgorgement totaling $1,116,650, prejudgment interest totaling $372,420, and civil penalties totaling $1,116,650. This matter is being litigated. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26552-0
8. On May 7, 2026, Commissioner Mark Uyeda addressed the 13th Annual Conference on Financial Market Regulation. The conference focused on the intersection of academic research and regulatory practice, especially in the areas of broken windows enforcement and active ETFs. Uyeda discussed the SEC’s approach to enforcement, particularly the impact of the “broken windows” policy, which focuses on addressing minor violations to prevent larger misconduct. The paper presented at the conference provided empirical evidence suggesting that such enforcement policies might reduce severe financial misconduct. However, Uyeda emphasized the importance of discretion in enforcement actions, pointing out that random or excessive enforcement could undermine the efficiency of markets. https://www.sec.gov/newsroom/speeches-statements/uyeda-remarks-conference-financial-market-regulation-050726
9. On May 5, 2026, the United States District Court for the Central District of California entered final judgments against David P. Ortiz and DaveGlo Investment Group, Inc. The SEC had previously charged Ortiz and his entity with selling securities in unregistered oil and gas offerings, acting as unregistered brokers, and failing to disclose financial conflicts of interest to advisory clients. Ortiz marketed and sold approximately $18 million in investments to 20 retail investors, earning more than $800,000 in transaction-based compensation. The court entered final judgments that permanently enjoined Ortiz and DaveGlo from violating securities laws and from selling any securities except for personal account transactions. The court also ordered Ortiz and DaveGlo to pay disgorgement of $816,934, prejudgment interest of $170,194, and Ortiz was ordered to pay a $50,000 civil penalty. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26549
10. On April 28, 2026, the SEC adjusted the dollar amount thresholds for both the assets under management and net worth tests for “qualified clients” under Rule 205-3 of the Investment Advisers Act of 1940. A qualified client is defined as one with at least $1.4 million in assets under management or a net worth exceeding $2.7 million. This adjustment will be effective June 29, 2026. Clients entering into advisory agreements prior to this date may continue to rely on the previous thresholds. https://www.paulweiss.com/insights/client-memos/sec-increases-qualified-client-dollar-amount-thresholds?utm_source=Concep%20Send&utm_medium=email&utm_campaign=SEC+Incre ases+%22Qualified+Client%22+Dollar+Amount+Thresholds_05%2f07%2f2026
11. On October 16, 2025, NASAA released its 2025 Enforcement Report, identifying digital assets, pig butchering scams, social media fraud, impersonation schemes, and other technology-based fraud as top investor threats. NASAA reported that state securities regulators conducted 8,833 active investigations, initiated 1,183 enforcement actions, and obtained more than $259 million in monetary fines and restitution. The report also noted increased complaints involving older investors, with digital assets, pig butchering, stocks, social media fraud, and promissory notes among the top products and schemes involving senior victims. State regulators also opened investigations involving broker-dealers, agents, investment advisers, investment adviser representatives, unregistered firms, and unregistered individuals, and reported enforcement actions against both registered and unregistered parties. NASAA emphasized that state securities regulators are using technology, public alerts, website shutdowns, and partnerships with blockchain and digital asset firms to detect fraud and help recover investor funds. https://www.nasaa.org/77718/nasaa-releases-2025-enforcement-report/