The Securities and Exchange Commission recently charged a fund-of-funds manager and its principals for allowing redemptions for insiders and preferred investors.
In addition, the New Jersey Bureau of Securities revoked the agent registration of Matthew Schulman, and Vermont ordered Raymond James to pay nearly $1.5 million over violations involving the EB-5 program.
Raymond James Ordered to Pay $1.45 Million to Vermont in EB-5 Case
The Securities Division of the Vermont Department of Financial Regulation has ordered Raymond James & Associates to pay penalties totaling $1.45 million, after the DFR found that a Raymond James registered representative allowed misuse of investor funds in a case involving the EB-5 program, which allows foreign investors to pursue a legal path to permanent residency in the U.S. through the investment of at least $500,000 in projects that create a certain number of jobs in an economically targeted area, often a rural or economically depressed area.
According to the agency, starting in 2006, Bill Stenger sold limited partnership interests in eight Vermont limited partnerships tied to EB-5 construction projects to foreign investors, who placed their funds into an escrow account in a Vermont bank pending U.S. Customs and Immigration Services approval. Upon approval, the funds were released to the partnership and the investor became a limited partner in a specific limited partnership.
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