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Code of Ethics & Standards of Professional Conduct Enforcement Procedures

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Background and Purposes

The principal purposes of Invest In the USA’s (“IIUSA“) Code of Ethics (the “Code“) and Standards of Professional Conduct (the “Standards“) (hereinafter referred to collectively as the “Code and Ethics Standards“) are to promote responsible, professional and ethical behavior by IIUSA’s members (each, a “Member“), to help protect the public and to reinforce the public’s confidence in the EB-5 Program and EB-5 Regional Center industry.

This document articulates the enforcement procedures (the “Enforcement Procedures“) that are followed by IIUSA’s Board of Directors (the “Board“) as it carries out its duties to enforce the Code and Ethics Standards. A major goal of these Enforcement Procedures is to ensure objectivity and fundamental fairness to all individuals who may be parties to a complaint arising under the Code and Ethics Standards. IIUSA holds its Members accountable to the Code and Ethics Standards and is intolerant of practices that threaten the integrity and reputation of the EB-5 Regional Center industry.

The Enforcement Procedures are used to help ensure compliance with the Code and Ethics Standards, which represent the values and principles that members have identified as important to maintaining marketplace integrity and confidence. The voluntary nature of joining IIUSA commits members to adherence to the Code and Ethics Standards and cooperation with its Enforcement Procedures by both the business entity and all individuals employed thereby.

These Enforcement Procedures are established and maintained by the Board, and the IIUSA Compliance Committee is tasked with keeping these Enforcement Procedures up to date.

Lodging a Complaint

Complaints may be lodged under the Code and Ethics Standards as follows:

  1. Any individual may lodge a complaint concerning a possible violation of the Code and Ethics Standards (a “Complaint”), whether or not the individual or entity is a member of IIUSA. A Complaint must be in writing, preferably on IIUSA’s form, “Code of Ethics and Standards of Professional Conduct Violation Complaint Form,” explaining in reasonable detail the nature of the alleged violation and be prepared to provide additional supplemental resources if asked. A Complaint must include the name, position, address, telephone number and signature of the author of the Complaint and a statement of the Code of Ethics and Standards sections alleged to have been violated. Complaints will be logged by IIUSA staff and forwarded to the Executive Director of IIUSA and the chair of IIUSA’s Compliance Committee for review in concert with outside counsel.
  2. These Enforcement Procedures are not a substitute for a court of law. The Board may, in its discretion, defer any action on a Complaint if a legal proceeding has commenced or is pending with regard to the subject matter of a Complaint, or for other exigent circumstances.
    1. For certain complaints, it may be appropriate for the Executive Director or the Board to report the alleged violations to the proper authority or regulatory body.
  3. Complaints may be submitted by IIUSA members, non-member practitioners within the EB-5 Regional Center industry, and the public at large.
  4. Confidentiality. Prior to the imposition of sanctions by the Board, all proceedings for alleged violations of the Code and Ethics Standards shall be confidential within IIUSA, except that the pendency, subject matter, and status of any such matter may be disclosed by IIUSA if:
    1. The respondent Member has waived confidentiality;
    2. The proceeding is based upon allegations that include either the conviction of a crime or discipline by a governmental agency with jurisdiction over the Member;
    3. The proceeding is based upon allegations that have become generally known to the public;
    4. There is a need to notify another person or organization in order to protect the public or the administration of justice; or
    5. Pursuant to subpoena, court order, etc., provided IIUSA’s outside counsel confirms the material is responsive to the same and required to be disclosed.

Investigation or Rejection of Complaint

  1. Within thirty (30) calendar days of receipt of a Complaint, the Executive Director of IIUSA, in consultation with legal counsel, must determine whether the Complaint against the Member:
    1. Alleges a violation of the Code and Ethics Standards; and
    2. Contains sufficient and reliable information and is not patently frivolous or inconsequential so as to warrant initiation of steps to determine factual sufficiency for a hearing.
  2. If the Executive Director and counsel determine there is merit, the complaint will be considered by an appointed ad hoc subcommittee of disinterested members (“disinterested” meaning the affirmative declaration of the absence of significant business or personal relationships with the Member who is the subject of the Complaint) of the Compliance Committee as detailed in Section D(1) below.
  3. If, by a simple majority vote, the ad hoc subcommittee of theCompliance Committee determines that a Complaint satisfies the criteria above, they will refer the matter for investigation pursuant to these Enforcement Procedures.
  4. If, by a simple majority vote, the disinterested members of the ad hoc subcommittee of the Compliance Committee determine that a Complaint does not satisfy the criteria above, they may recommend to the Board that the Complaint be dismissed as without merit. If the Board approves such dismissal, it shall authorize the Executive Director to notify the complainant of this decision.
  5. If the ad hoc subcommittee of the Compliance Committee determines that a Complaint warrants investigation pursuant to Section C(3) above, the Compliance Committee shall promptly:
    1. Provide the Member against whom the Complaint was filed copies of IIUSA’s Code and Ethics Standards, these Enforcement Procedures and written notification (a “Notification”) stating that an investigation is to be conducted. The Notification shall summarize the issues raised in the Complaint and notify the Member that the Member may submit a response and supporting documentation to the Compliance Committee; and
    2. Notify, in writing, the complainant that the Complaint has been received and indicating the status of the Complaint; and
    3. If additional information is requested of the complainant, they will have 30 days to respond or the Complaint will be dismissed.

All material gathered by IIUSA in the course of any investigation or hearing conducted under these Enforcement Procedures, including but not limited to information submitted by a complainant and the Member against whom a Complaint has been lodged, will be the property of IIUSA.

Investigation Hearing Panels

Upon delivery of a Notification pursuant to Section C(5)(a) above, the Executive Director, in consultation with outside counsel, shall appoint an investigation and hearing panel (a “Panel”) composed of three (3) disinterested members of IIUSA, all of whom shall be members of the Best Practices Committee and/or disinterested members of the Board.
The three (3) members of a Panel shall constitute a quorum. A Panel shall act only with the concurrence of two members of such Panel. When appointed, the Executive Director shall designate one of the Panel members as the Chair of such Panel.
The Panel will meet telephonically or any location as designated by the Chair of the Panel.

Panels shall have the power and duty to:

  1. Investigate the allegations in a Complaint via such means as they deem necessary, including, but not limited to:
    1. The submission of written queries to parties to a Complaint;
    2. Interviews (in person or by telephone) of persons with knowledge of matters alleged in a Complaint;
    3. To conduct hearings into allegations contained in a Complaint, and
    4. Consult with outside and disinterested experts; and
  2. Submit to the Board findings of fact, conclusions, and recommendations, together with the record of any hearing that has occurred in connection with the Complaint.

Each Panel Chair shall have the authority to:

  1. Conduct prehearing conferences;
  2. Consider and decide prehearing motions and procedural questions;
  3. Convene and conduct a hearing; and
  4. Schedule (postpone) hearing action as appropriate.

Hearings

Panel hearing and proceedings under the Code and Ethics Standards are neither civil nor criminal in nature, but are private matters conducted pursuant to the terms of these Enforcement Procedures.
These proceedings are meant to be informal and, except as expressly set forth herein, shall not be governed by the rules of civil procedure of any state or federal court or rules of evidence. Questions of procedure and evidence shall be decided by the hearing Panel.
Charges of alleged violations of the Code and/or Standards shall be established by clear and convincing evidence.
The burden of proof in proceedings seeking discipline or sanctions is on the complainant.
At the discretion of the Panel or upon request of either party, a conference may be ordered for the purpose of obtaining admissions or otherwise narrowing the issues presented by the Complaint or anticipated to be presented at the hearing. The conference shall be held before the Panel Chair or another member of the panel designated by the Chair.
Upon the request of the complainant or the respondent, and at the expense of the requesting party (unless otherwise agreed), a Panel shall allow the hearing to be recorded.
Failure to answer charges made shall result in disciplinary action.
If a party should fail to appear when specifically so requested by the Panel or the Board, the party shall have been deemed to have admitted the factual allegations which were to be the subject of such appearance and/or a concession to any motion or recommendations to be considered at such appearance. The Panel or Board shall not, absent good cause, continue or delay proceedings due to a party’s failure to appear.

Grounds for Discipline; Sanctions

It shall be a ground for discipline for a Member to:

  1. Violate the Code and Ethics Standards, and/or are convicted of violating any other laws or rules of any jurisdiction (foreign or domestic) regarding the EB-5 Regional Center industry;
  2. Willfully violate the Board’s decision to impose discipline; or
  3. Willfully fail to appear before a Panel.

Upon the conclusion of a hearing, a Panel may recommend to the Board:

  1. That the matter be dismissed;
  2. That the Board impose a sanction upon the Member;
  3. The particular sanction, if one is recommended.

Upon the recommendation of a Panel, the Board may:

  1. Dismiss the matter; or
  2. Impose a sanction upon the Member.
If pursuant to the procedures set forth herein, the Board determines that conduct proscribed by this Code and Ethics Standards has occurred, the Board may impose sanctions, including reprimand, censure, probation (with terms), suspension, or permanent revocation of IIUSA membership. Sanctions available to be imposed by the Board include, but are not limited to, one or a combination of the following:

  1. Reprimand—A formal expression of disapproval of conduct communicated privately by the Board to the pertinent Member;
  2. Censure—A formal expression of disapproval that is public;
  3. Probation of Membership Subject to Terms—Failure to meet terms will subject an IIUSA member to any of the disciplinary actions or sanctions;
  4. Restrictions on Use of Marks—Restrictions on utilization of IIUSA marks and/or publicizing the Member’s association with IIUSA;
  5. Restrictions on Advertising and Sponsorships—Restrictions on ability to advertise in IIUSA publications or sponsor IIUSA events;
  6. Suspension—Suspension of IIUSA membership for a specified period of time;
  7. Revocation—Revocation of IIUSA membership; and
  8. Additional Sanctions—Any additional sanction the Board determines is appropriate taking into consideration the facts and circumstances of each particular situation.

Except for revocation of membership, conditions may be attached to any of the foregoing sanctions. Failure to comply with such conditions shall be grounds for reconsideration of the matter and imposing additional sanctions against the Member.

In imposing a sanction, the Board shall consider the following factors:

  1. Whether the Member has violated a duty owed to a client, the public or the EB-5 Regional Center industry;
  2. Whether the Member acted intentionally, knowingly, or negligently;
  3. The amount of the actual or potential injury caused by the Member’s actions or inactions; and
  4. The existence of any aggravating or mitigating factors.
Disposition of discipline of Members may be public at the discretion of the Board.

Lifting Sanctions

A Member whose membership is suspended for more than six months or whose membership is revoked shall be reinstated or readmitted only upon written decision of the Board. No Member may petition for reinstatement until the period of suspension has expired or in the case of revocation, until two (2) years after the effective date of revocation. Any other sanction, if necessary (e.g., restrictions on utilization of IIUSA marks) shall set forth the time at which the sanction shall be lifted or expire.
A petition for the lifting of sanctions must be in writing, but need not take any particular form, provided that it shall specify with particularity the manner in which the Member meets each of the criteria specified in Section G(3) below or, if not, why there is good and sufficient reason for the lifting of sanctions. The Member petitioning for lifting of sanctions shall file a copy of the petition with the Board, which, if applicable, shall provide a copy to the original complainant.
A Member is eligible for consideration of the lifting of sanctions only if the Member meets each of the following criteria, or, if not, presents good and sufficient reason why the Member’s sanctions should nevertheless be lifted:

  1. The Member has fully complied with the terms and conditions of any prior sanction; and
  2. The Member has not engaged in any other misconduct since imposition of the sanction that would itself constitute a violation of the Code and Ethics Standards.

Within thirty (30) days after receiving a Member’s petition for lifting of sanctions, the Board shall promptly refer the matter to a hearing Panel in accordance with the procedures set forth in Section E above. Within sixty (60) days of appointment, the Panel shall conduct a hearing at which the Member shall have the burden of demonstrating by clear and convincing evidence that he or she has met each of the criteria in Section G(3) or, if not, that there is good and sufficient reason why the sanctions imposed upon the Member should nevertheless be lifted. The Panel shall file a report with the Board setting forth its findings and recommendations.

The Board shall promptly review the report of the hearing Panel and issue its decision. If the Board denies petition for lifting of sanctions, the Board shall issue a written opinion setting forth the ground for its decision and shall identify the period after which the Member may reapply, if any.

The Board, at its discretion, may impose conditions on the lifting of sanctions upon a Member.

Disclaimers: No content or information provided within this document should be construed to constitute legal advice or services. As a service to its membership, IIUSA seeks to provide informational and educational materials regarding a range of issues, including, among others, ethical business behavior, but urges it members and others reading this material to seek legal counsel as appropriate. In addition, while IIUSA endeavors to keep the information it provides up to date and current, please be advised that such information may not reflect the most current information available. IIUSA is not responsible for any subsequent use of these materials or reliance on any information contained therein.