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EB-5 Insights Where Government Policies and Business Realities Converge

William Mack

Posts by William Mack

Posted in Investment, Securities Law

On Thursday, July 27, regulators and industry professionals gathered in Washington, D.C. to discuss the current regulatory environment, cybersecurity, and other hot topics at the SEC and FINRA’s 2017 National Compliance Outreach Program for Broker-Dealers. The panelists, including SEC Commissioner Michael Piwowar, FINRA President and CEO Robert Cook, and Susan Axelrod, the Executive Vice President of… Continue Reading

Posted in EB-5 Investment, Securities Law

Nearly all U.S. broker-dealers are members of the Financial Industry Regulatory Authority (FINRA).  FINRA regulates, and provides oversight and guidance for its member firms.  When a broker-dealer becomes a FINRA member, they enter into a membership agreement which, among other things, specifies which financial products and services the broker-dealer is permitted to offer to its… Continue Reading

Posted in EB-5 Program

Earlier this month, the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) each published their 2016 exam priorities letters. Each agency publishes an exam priority letter annually in which they identify topics of examination focus for the coming year, recurring challenges faced by firms, and perceived areas of heightened risk to… Continue Reading

Posted in EB-5 Program, Securities Law

Last week, the U.S. Securities and Exchange Commission (SEC) announced a series of enforcement actions against lawyers across the country, charging them with offering EB-5 investments and receiving compensation while not registered to act as brokers. According to the SEC, the attorneys and firms involved in these matters assisted in the facilitation of investment sales… Continue Reading

Posted in EB-5 Program

Yesterday, new FINRA Rule 2040 became effective.  The rule was approved by the SEC earlier this year.  Rule 2040(c) requires a broker-dealer who sells EB-5 securities disclose to investors the amount of fees paid to foreign finders.  In addition, a broker-dealer must receive written acknowledgement from an investor which shows that the investor is aware… Continue Reading

Posted in EB-5 Investment

Use of EB-5 as part of the capital stack for an EB-5 project is a highly complicated prospect. Identifying the right Regional Center or forming a Regional Center and structuring the project so that it is compliant with the myriad of USCIS/DHS rules is a daunting endeavor. The other very real concern for these projects is… Continue Reading

Posted in EB-5 Investment, EB-5 Project, Securities Law

Yesterday, the U.S. Securities and Exchange Commission (SEC) ordered a US-based foreign finder operation to cease and desist from operation as an unlicensed broker-dealer.  The charges are some of the first against brokers handling investments in the EB-5 Immigrant Investor Program and follow earlier SEC actions against fraudulent EB-5 offerings. According to the SEC’s order,… Continue Reading

Posted in Securities Law

After a nationwide conference call of industry participants sponsored by agencies of the U.S. government and several years of cautionary discussions, through its recent actions, the agency that regulates securities sales in the United States, the Securities and Exchange Commission (SEC), and its self-regulatory arm, the Financial Industry Regulatory Authority (FINRA), have made compliance with… Continue Reading

Posted in Securities Law

Section 15(b) of the Securities Exchange Act of 1934 (the Act) requires registration of any broker-dealer effecting securities transactions by means of interstate commerce unless an appropriate exemption is available. In order to register as a broker-dealer in the United States, an application for registration—called Form BD—must be made to the SEC and a self-regulatory… Continue Reading

Posted in EB-5 Investment, Securities Law

The Financial Industry Regulatory Authority, Inc. (FINRA) regulates member brokerage firms and exchange markets in the United States. FINRA is a not-for-profit non-governmental organization that acts as a self-regulatory organization (SRO). SROs were created by the Securities Exchange Act of 1934 to enforce certain industry standards and requirements related to securities trading and brokerage. FINRA… Continue Reading

Posted in EB-5 Program, Securities Law

In connection with an EB-5 program, foreign investors are offered a special subset of private funds and securities offerings made through regional centers and non-regional centers approved by the USCIS. In certain instances, when the securities are offered or sold by an intermediary, these transactions are subject to US securities laws. There is a significant… Continue Reading

Posted in EB-5 Investment, General

In greater frequency, broker-dealers are participating in EB-5 financings.  These broker-dealers engage foreign finders and foreign affiliates to locate suitable investors.  Engaging foreign finders and foreign affiliates can pose compliance risks which may elevate a firm’s AML risk level and create suitability concerns for the broker-dealer. In recent literature, FINRA has reminded firms that the… Continue Reading