As the national trade association representing over 275 EB-5 Regional Centers, IIUSA welcomes the Securities Exchange Commission’s (SEC) action against two companies for unregistered broker-dealer activities related to raising capital under the EB-5 Program (the “Program”).
Compliance with – and effective enforcement of – U.S. securities laws is as essential for the EB-5 Program as it is for any investment vehicle to maintain the confidence of all stakeholders (from investors to project developers and the often many organizations in between) and ensure that the Program continues to bring capital and job creation to American communities. Inter-agency oversight of the Program is needed to protect its integrity and this latest enforcement action demonstrates that federal authorities take the role of deterring non-compliance with U.S. securities laws seriously to ensure lawful capital raising activities are undertaken to contribute to economic growth and create jobs in America. In FY2013 alone, the Program generated $2.0 billion in foreign direct investment, contributed $3.58 billion to U.S. GDP and supported over 41,000 jobs at no cost to taxpayer.
IIUSA has a track record of working cooperatively with the SEC and other regulatory agencies to strengthen the integrity of the program. For example, IIUSA filed an amicus brief supporting earlier SEC action that stopped a Regional Center and developer from making misleading claims about investment opportunities, and we regularly provide our members with opportunities to hear from experts in securities and immigration law – including representatives from federal and state regulatory agencies — to better understand program requirements and support their compliance.
IIUSA has engaged with the Council of Development Finance Agencies (CDFA), the North American Securities Administrators Association (NASAA), the SEC, U.S. Department of Commerce, staffs of several Governors, the National Association of Counties (NACo), U.S. Conference of Mayors and many other stakeholders to educate them on the EB-5 program and engage them as partners in deterring fraud and abuse. And, we have worked with leading members of Congress to develop legislation that will further enhance Program integrity.
As Congress works on legislation to reauthorize the EB-5 Regional Center Program, we look forward to providing comments on reform measures to strengthen government enforcement capabilities and oversight responsibilities.