NO COMMISSIONS, NO WORKAROUNDS, NO EXCUSES Unlicensed intermediaries frequently attempt to disguise broker activity by recharacterizing commissions as“ marketing fees,”“ consulting fees,” or“ introducer fees.” Regulators have repeatedly rejected these tactics. If compensation is:
• Tied to investor closings,
• Based on capital raised, or
• Contingent on a successful subscription, then it is broker activity regardless of what the agreement calls it.
Disclaimers stating“ not acting as a broker,” routing payments through offshore entities, or inserting intermediaries between parties offer no legal protection. The SEC evaluates substance over form, and enforcement actions routinely pierce these cosmetic structures.
• Administrative, translation, or non-solicitation marketing support, where compensation is not transaction-based and no investor solicitation occurs
These activities are lawful because they do not trigger U. S. securities jurisdiction. The EB-5 program has long relied on legitimate offshore agent networks, and U. S. securities law does not prohibit that model.
Activities That Absolutely Require Broker-Dealer Registration By contrast, the following conduct unambiguously requires brokerdealer registration or proper affiliation:
• Soliciting any investor physically present in the United States, regardless of nationality
Soliciting U. S. citizens or permanent residents anywhere in the world
• Operating from within the
United States while sourcing EB-5 investors
• Receiving transaction-based, success-based, or closingcontingent compensation
• Using social media, messaging apps, webinars, or digital marketing to reach U. S.-based investors
One of the most dangerous assumptions among unlicensed EB-5 intermediaries is that delayed enforcement implies tolerance. It does not
In these circumstances, there is no exemption by geography, nationality, or labeling. A brokerdealer license is mandatory.
WHAT A BROKER- DEALER DOES AND WHY REGISTRATION MATTERS Broker-dealers support EB-5 issuers, regional centers, and investors by conducting due diligence, managing subscription processes, and ensuring securities offerings comply with federal law. Their registration under the Securities Exchange Act of 1934, Section 15( a)( 1), is not optional.
The Financial Industry Regulatory Authority( FINRA) oversees broker-dealers, and registration can be verified through FINRA’ s BrokerCheck system.
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