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Securities and Exchange Commission (SEC)

The U.S. Securities and Exchange Commission (SEC) is a U.S. government agency that works to investigate and enforce breaches of federal securities laws. 

While most regional center investments have exemptions from the registration requirements of federal securities laws, these investment are still subject to the regulations relating to the offer and sale of securities, including federal anti-fraud provisions. Thus, the SEC will investigate allegations regarding specific EB-5 investments.

Increasingly over the last several years, the SEC has been investigating EB-5 fraud claims, as well as unregistered broker-dealer activity related to EB-5 investments. “Although the EB-5 program adds a different context to these actions, in most regards these fraud cases are no different than the many other offering fraud cases we bring every year,” the agency has declared. SEC charges can lead to individuals and entities facing permanent injunctions, disgorgement, prejudgment interest, civil penalties, the appointment of a receiver, and even prison time.

The SEC also works with the Financial Industry Regulatory Authority (FINRA) regarding the role of broker-dealers in the EB-5 program.

Stay informed about EB-5 news.