Why you should use Whyte & Co. for your EB-5 project?
The first and most important reason is you are issuing a security, not selling green cards. Understanding the securities rules that apply to the issuing of your security is an important step to your projects’ success. Transparency and compliance with SEC rules for EB-5 has become the most important issue with EB-5 projects.
Having the right due diligence completed, and being fully compliant with securities rules and regulations is paramount to the success and marketing of your project.
Why jeopardize all the hard work and dedication you and your founding partners have put into your EB-5 project by missing something… anything? Your project should have a coordinated set of due diligence files that includes all the documents prepared by your various professionals, i.e., building approvals, plan approvals and permits plus time tables and detailed review of the members on your EB-5 project team. Your EB-5 investors should have complete and full access to these diligence files at all times for your protection and the investors’ ability to have their professionals advise them on the risk of your project. Yes, you have a securities lawyer, perhaps a corporate attorney, an immigration attorney, now you need a registered broker dealer. You have business plan writers, economists and advisors, including the agencies overseas that sell and market your project. A broker dealer ties all of these professionals together and focuses on compliance – see EB-5 wheel of success. Having an understanding of securities regulations and having the ability to manage your project in America as well as overseas expands the projects’ marketing potential.
The selling of an EB-5 project is the issuing of securities. Issuing securities in the United States must follow the rules of the various laws that cover that selling and marketing effort. The reason that registered broker dealers exist in the United States is to ensure the securities being sold are properly prepared, disclose all the risks and divulge all the details of the project to the investors. Also, a broker dealer can help oversee the EB-5 project to monitor the marketing efforts of the issuers. Involving a broker dealer with your EB-5 project allows your project to market within the United States, opening a wider market for your project.
Why drive 90 MPH in a 60 MPH zone. And the EB-5 sector is starting to look like a school zone where you should drive 25MPH!
We agree, better to be safe, compliant and transparent.
Whyte & Co. agrees, better to be safe, compliant and transparent. None of the following is approved by the regulators, and is for information purposes only.
The sale of interests in EB-5 offerings is a securities transaction that involves direct or pooled investments sold through private placements that raise many of the same concerns as those associated with sales of any private placement securities transaction. Yes, the rules are changing for EB-5, and will become clearer over time, but one thing is certain, selling of EB-5 is selling securities.
We must ensure all transactions fit the changing EB-5 rules. Also that EB-5 investors understand all the risk associated with an EB-5 investment. As you find EB-5 investors, you are selling US based securities, and as such you MUST follow all the rules within the United States. In this regard, the SEC has recently filed a number of civil actions in federal court alleging securities violations, including fraud, in connection with several EB-5 programs. Using an experienced broker dealer that conducts thorough due diligence on your EB-5 project could help prevent some of the abuses and violations that are of concern to the regulators. Identifying and correcting potential issues prior to marketing of an EB-5 project and before they become potential problems could be beneficial for your EB-5 project. Additionally, proper disclosures to your EB-5 investors and documenting their acknowledgement of the risks associated would go a long way to protecting your EB-5 project and keeping you compliant.
EB-5 investors should be made aware that all due diligence materials should be reviewed by the investor’s independent professionals before making any EB-5 investment.
For more information on this important topic please visit www.finra.org
Please see for Rule 2111 for further information: https://www.finra.org/industry/faq-finra-rule-2111-suitability-faq
We at Whyte & Co. will manage this process for you and help your project be not only transparent and fall within all of the regulations, but our work will help you in your successful marketing of your EB-5 effort