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U.S. Securities Regulators Take Notice of EB-5

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 securities laws for those in the EB-5 industry a priority.

According to reports, the SEC may bring actions against as many as 20 individuals who were accepting finders’ fees without being registered as broker-dealers or associated persons of broker-dealers.  In addition, FINRA indicated in its recent announcement of examination priorities that it is focused on its members’ due diligence and suitability checks in the sale of private placements, including EB-5 securities.

As the EB-5 industry matures, those in the industry can expect to see more attention from regulators, including enforcement actions.  Several years ago, Greenberg Traurig combined efforts of its immigration team and its securities regulation team to provide advice for industry participants.

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About this Author

William B. Mack, Greenberg Traurig Law Firm, New York, Finance Law Attorney

William B. Mack is part of the firm’s government affairs and financial regulatory and compliance groups. He is experienced in advising companies on regulatory and compliance matters relating to the Securities and Exchange Commission regulations, the Exchange Act, Anti-Money Laundering laws and Financial Industry Regulatory Authority (FINRA) rules.

William’s practice involves all aspects of broker-dealer regulation, including Self-Regulatory Organization (SRO) membership, supervision, employment, research, soft dollar arrangements, chaperoning of...