The U.S. Securities and Exchange Commission has issued warnings throughout 2015 that it would join with the USCIS to investigate and enforce the laws regarding third parties in the EB-5 process acting in the capacity – though not in the named role – of security brokers.
According to the SEC, “Individuals and entities performing certain services and receiving commissions must be registered to legally operate as securities brokers if they’re raising money for EB-5 projects.”
This is not some new twist on the EB-5 investment immigration visa program. This regulation has been on the books, in principle, for a very long time. It is simply illegal to operate as a securities broker without being duly registered. Period.
The day of reckoning has finally come as the SEC has filed charges in federal court against a number of persons who have operated outside of the law and who have illegally received, therefore, funds for their unlicensed broker-like activities. Many changed have been willing to cease and desist from acting as unregistered brokers, typically along with some form of restitution. Others have been charged with fraud.
This should come as good news for EB-5 investors, because the SEC is acting to protect investors from people looking to make a fast buck whilst being ignorant of the law and, particularly, those who might scheme to scam investors.
We applaud the involvement of the SEC and its assertive actions being taken to protect the EB-5 program and its foreign investors.
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