EB-5 regional centers and issuers take heed. The Securities and Exchange Commission (“SEC”) is pursuing litigation against parties in several EB-5 deals. We expect the SEC to increase efforts to prosecute regional centers, issuers and broker dealers who don’t play by the rules in the EB-5 investment industry. Mintz Levin’s EB-5 Financing Practice just released an alert on limiting securities litigation risks in EB-5 transactions. This is go-to reading for anyone in the EB-5 industry. Here are the highlights of the article, along with a few of our thoughts about concerns that borrowers need to have before accepting direct proceeds in loans from EB-5 regional centers. Continue Reading Securities Law Risk Mitigation in EB-5 Offerings
As the EB-5 program continues to expand and regional centers have attracted increasing attention from foreign investors seeking to become permanent lawful U.S. residents, there has been a corresponding increase in regulatory scrutiny of EB-5 investments. The increased attention has resulted in civil lawsuits brought by the Securities and Exchange Commission (SEC), and criminal prosecutions by the Department of Justice (DOJ).
EB-5 deals present risk for regional centers, issuers and investors.
With the uptick in EB-5 litigation, risk mitigation could not be more important for all stakeholders in an EB-5 transaction.
Hear from Adam Sisitsky, a member of Mintz Levin’s Securities Litigation Practice, on the three D’s of EB-5 risk mitigation: Continue Reading The Three D’s of EB-5 Risk Mitigation [VIDEO]
With the proliferation of market makers and brokers abroad in the EB-5 space, U.S. issuers need to pay close attention to the Foreign Corrupt Practices Act (FCPA).
The FCPA penalizes specific U.S. persons and businesses that make payments to foreign government officials to assist in obtaining or retaining business. The FCPA also contains anti-bribery provisions that carry stiff penalties. The U.S. government takes FCPA violations seriously, and we know all too well from enforcement patterns that minor violations are prosecuted. Regional centers and EB-5 project sponsors should get policies into place now to ensure compliance with the FCPA. Continue Reading Know Your EB-5 Intermediary Abroad: Avoid FCPA Traps in Marketing Your EB-5 Deal Outside the United States [VIDEO]
There is speculation on the Hill that lawmakers will not take on reforming or improving the EB-5 Program until January 2016. But don’t think for a second that lawmakers will simply pass an extension of the Program and indefinitely shelve refashioning EB-5. Last month, the General Accounting Office (GAO) published a report on the Program (Immigrant Investor Program: Additional Actions Needed to Better Assess Fraud Risks and Report Economic Benefits). Congress is reading this report, which is a 58 page “gotcha” on EB-5. With recent SEC actions targeting EB-5 fraud, the EB-5 industry is at a point of inflection. Continue Reading GAO Report on EB-5 a Possible Blueprint for Lawmakers and New Legislation
On August 25, 2015, the U.S. Securities and Exchange Commission (SEC) filed a civil fraud suit against Lobsang Dargey, a Bellevue, Washington-based real estate developer and alleged fraudster, who also happens to be a brother-in-law of tennis star Andre Agassi. Dargey had ventured into the EB-5 Program as a developer and regional center owner, securing designation by United States Citizenship and Immigration Services (USCIS) for two regional centers, Path America SnoCo and Path America KingCo. The complaint is relevant to both investors and regional centers in the EB-5 industry, as well as to lawyers advising issuers in EB-5 offerings. Continue Reading Failure to Investigate Could Mean “Game-Set-and-Match” for EB-5 Investors: SEC Case against Brother-in-Law of Tennis Star Andre Agassi Shows Risk for Would-be Immigrant Investors
The Securities and Exchange Commission (“the Commission” or “SEC) recently published an overview of Foreign Corrupt Practices Act (“FCPA) enforcement actions. Since 2010, the SEC has had a specialized unit devoted to enforcement of the FCPA.
How does this relate to EB-5 practice? What do regional centers and EB-5 issuers need to know about the FCPA? Continue Reading Potential FCPA landmines selling EB-5 deals abroad through intermediaries