Multiple firms involved in the solicitation of investment capital for the Immigrant Investor Program (also known as "EB-5") have recently been charged by the SEC with acting as unregistered brokers. Neither In re Ireeco, LLC, nor SEC v. Luca Int’l Group, LLC, the first cases of this type, comes as a complete surprise (see "Immigrant Investor Program Raises SEC Broker Registration Issues" in the Summer 2014 Expect Focus).
The EB-5 program allows foreign investors to qualify for U.S. residency by investing in new commercial enterprises that create U.S. jobs. Because these investments frequently take the form of securities, firms that receive fees for facilitating the transactions may be required to register as brokers under the Securities Exchange Act of 1934.
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