CORPORATE & SEC

A full-service corporate and business immigration law firm, Mona Shah & Associates Global has placed Corporate/Securities law at the core of its practice and development since our establishment. Our Corporate/SEC team is committed to excellence in the practice of equity investments and offerings, securities compliance and corporate affairs. We are frequently involved in landmark deals that impact the commercial landscape of the US and the world, and we have won continuous praise from clients as well as prestigious legal accolades and awards.

Core Areas of Practice

  • Foreign direct investment, including formation of foreign-invested enterprises by way of investment or merger and acquisition (M&A), equity or asset restructuring
  • Outbound investment, including forming overseas investment vehicles, securing approval and registration of overseas investments, acquisitions or sales of equity interests or assets of overseas enterprises, coordinating with or managing other advisors in due diligence, and documentation and negotiation in the UK and UAE
  • Private equity investments, including deal structuring, due diligence, contract negotiation and equity transfers and divestments
  • Private offerings in the US and overseas, including drafting operating agreements, escrow agreements, subscription agreements and private placement memorandums
  • Corporate and/or EB-5 compliance, including conducting compliance investigations, formulating policies and providing advise on compliance with securities laws in private placement offerings under Regulations D and S and that of the EB-5 Immigrant Investor Program
  • Securities and Exchange Commission (SEC) registration, exemption filing, no-action letters
  • Investment in the Real Estate sector including review and drafting of local and international contracts including bills of sale and loan agreements/promissory notes and coordinating closings
  • Agents including drafting the agency and finder agreements

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EB-5 & SEC

What is the relationship between EB-5 and SEC?

When a US-based project approaches an investor to invest in an EB-5 project, the project is engaged in the offer and sale of securities. Such activities are regulated by the Securities and Exchange Commission (SEC) and the relevant state securities authority.

Who is the SEC?

The Securities Exchange Commission or SEC was founded by the Securities Exchange Act of 1934.

The Securities Act of 1933 together with the Securities Exchange Act of 1934, was designed to restore investor confidence in the US’s capital markets by providing investors and the markets with more reliable information and clear rules of honest dealing.

Companies publicly offering securities for investment dollars must tell the public the truth about their businesses, the securities they are selling, and the risks involved in investing. People who sell and trade securities – brokers, dealers, and exchanges – must treat investors fairly and honestly, putting investors’ interests first.

What does the SEC do?

The SEC oversees the key participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisers, and mutual funds. Here the SEC is concerned primarily with promoting the disclosure of important market-related information, maintaining fair dealing, and protecting against fraud.

Crucial to the SEC’s effectiveness in each of these areas is its enforcement authority. Each year the SEC brings hundreds of civil enforcement actions against individuals and companies for violation of the securities laws. Typical infractions include insider trading, accounting fraud, and providing false or misleading information about securities and the companies that issue them.

SEC & EB-5

As participation in the U.S. Citizen and Immigration Services (USCIS) Immigrant Investor Program or “EB-5 program” grows, regulatory interest increases.

On November 20, 2013, the Associate Director Stephen Cohen of the SEC’s Division of Enforcement spoke to a meeting sponsored by the Federal Bar Association about the securities law issues implicated by the EB-5 program, and about the SEC’s efforts and interest in the area. Cohen’s principal message was that sales of interests through the EB-5 program could involve securities, and he indicated that this occasionally surprised people involved in the program. Therefore, participants should pay attention to the requirements of federal securities laws. Cohen said that the SEC is very involved in considering EB-5 activity, including two recent enforcement actions.

The SEC and USCIS have been closely coordinating on EB-5 program issues and specific investigations since then. They share a particular interest in making sure that the EB-5 program is free from fraud. The new director of USCIS, i.e. Director L. Francis Cissna, stated in both the hearing on “Citizenship for Sale: Oversight of the EB-5 Investor Visa Program” before the Senate Committee on the Judiciary on June 19, 2018 and the meeting with IIUSA, the largest trade association in the EB-5 industry that integrity shall be USCIS’ focus moving forward.

The most obvious impact of the securities laws on offerings through the EB-5 program involves how the offerings are structured. Securities lawyers are in the best position to inform a company if the fundraising activities of a Regional Center or a developer constitute the sale of securities. Notably, “an investment is a security if an investor’s money is put at risk in a project whose success depends on the efforts of others.” The fact that the security is privately offered and does not fit the classic definition of an exchange-traded security does not mean that it is not a security.

MSA & SEC COMPLIANCE

MSA’s securities attorneys are well versed in EB-5 related securities issues including:

Regulation D Rule 506;
Regulation S and the accredited investors verification of the Securities Act of 1933;
The broker-dealer relationship requirement under the Securities Exchange Act of 1934;
The disclosure requirement under the anti-fraud provision of Rule 10(b)(5).

At MSA, we stay abreast of the latest changes in the securities law regarding EB-5 private offerings, such as: Title II of the Jumpstart Our Business Startups Act (JOBS Act); The Dodd-Frank Act; SEC implementation rules regarding general solicitation; Financial Industry Regulatory Authority (FINRA) Guidance for Broker-Dealer on EB-5 Projects; North American Securities Administrators Association (NASAA) Enforcement Report on EB-5 projects.

MSA also submitted public comments to the SEC regarding Title II of the JOBS Act.

Our EB-5 and SEC articles have been published in major trade publications, such as LexisNexis, ILW, American Immigration Lawyers Association (AILA), EB5info.com, eb5investors.com, etc. (Please see Publications)

Our EB-5 and securities law topics include: crowdfunding and EB-5 financing, SEC enforcement action in small violations in broker/dealer cases, conducting general solicitation in EB-5, SEC enforcement action in EB-5 securities fraud cases, JOBS Act and EB-5, SEC due diligence requirement and EB-5.