Many regional centers form limited partnerships or other pooled investment vehicles known as new commercial enterprises in EB-5 terminology to raise capital for project companies seeking to use the regional center’s designation granted by the USCIS.  These regional centers may be motivated by keeping the identity of their migration agents confidential or simply by the desire to generate a greater economic return for its principals by paying investors a preferred return of 2% while charging the project companies 5% interest, thereby making the spread.  Whatever the reason, the repeated formation of pooled investment vehicles to provide financing to project companies may constitute capital raising (i.e., effecting transactions in securities) for the account of others which requires registration as a broker-dealer under Section 15(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).Continue Reading The Inadvertent Broker-Dealer: Using EB-5 New Commercial Enterprises to Raise Capital for Project Companies