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Can foreign attorneys accept commissions from regional centers?

We are a South Korea-based law firm with attorneys licensed to practice law in South Korea and the U.S. Recently, we started to get involved in the EB-5 market. We have some questions about receiving commissions. Can we receive referral fees from regional centers? Can a lawyer licensed in the U.S. but currently working for a South Korea law firm legally receive referral fees from regional centers?

Answers

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    Julia Roussinova

    Immigration Attorney
    Answered on

    Please consult a U.S.-licensed securities counsel and ethics counsel to discuss all potential issues.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    This is an SEC regulations question. You should consult an attorney who specializes in SEC regulations.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    Under the current SEC rules and regulations and related enforcement rulings, it appears an arrangement as described is not acceptable as far as the U.S.-licensed lawyer is concerned. However, prior to putting any fee referral in place, consult an EB-5 attorney on a detailed analysis of fee referral arrangements in relation to the SEC rulings on the issue.

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    Russell C Weigel, III

    Securities Attorney
    Answered on

    Generally speaking, the regulation of securities broker conduct by the SEC is limited to the territorial jurisdiction of the United States of America, provided that no violation of the anti-fraud provisions of the federal securities laws is apparent. As for the remainder of your questions, your specific circumstances cannot be addressed in an open forum such as this. You should consult U.S. securities counsel.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    I'm going to leave this to my securities law friends.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    The SEC regulates payment of commissions. Also, lawyers are subject to their state bar rules and may also be subject to Section 15(a) of the Securities and Exchange Act of 1934 that requires a person to be registered as a securities broker-dealer before accepting such fees.

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    Marko Issever

    EB-5 Broker Dealer
    Answered on

    My recommendation for you, as a licensed U.S. attorney, is to be paid for legal work by your client and not to receive any kind of referral fee/commission from the regional center. If you had no ties to the U.S. and could simply operate as a foreign migration agent, that could have been different. But in your case, the situation is clearly different. If you receive finder fees from the regional center and legal fees from your client, you will most likely put yourself in a potential conflict of interest that could jeopardize your U.S. license.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    Your license to practice law does not impact your potential role as a foreign finder. However, if you are a U.S. citizen or permanent resident, you would be prohibited from accepting transactional-based compensation. I would not risk your license to practice law or run afoul of the SEC. I recommend before you enter into any finders agreement, you confer with a securities attorney who can properly advise you. Another alternative would be to seek out a broker-dealer and become properly licensed.

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    Phuong Le

    Immigration Attorney
    Answered on

    The regional center (or the issuer) should be screening you to let you know whether you qualify or not. If your work/presence/contacts flow back to the U.S. in any substantive way, though, chances are the answer is no and the RC will likely require that you be licensed with the SEC. (Not to mention there may be issues with the local bar where you practice in the U.S. as well).

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    Charles Foster

    Immigration Attorney
    Answered on

    Generally speaking, receiving referral fees from a regional center raises a number of ethical questions and other questions under U.S. Securities laws. Receiving referral fees in the United States can clearly be in violation of U.S. securities law, unless you are a registered broker-dealer. Agents abroad, which could include attorneys, may not necessarily be subject to U.S. securities laws in a case like this; however, the lawyer licensed in the U.S., under certain circumstances, could have greater risk.

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