Is it legal for Regional Centers to list their current projects on their company websites or does this break SEC securities laws?
There are clearly Securities issues at play here for OFFERS, but simply having a website and offering information is perfectly legal online.
Thank you for contacting us. Before a regional center is certified, it is vetted regarding SEC regulations. If you wish further information on how this is done, we can arrange a consultation.
It is highly recommended that the EB-5 Regional Center seek the services of an experienced EB-5 securities attorney. The SEC Attorney will be able to advise on the legally correct procedures for advertising the project on line , at trade shows, seminars etc.either in the US or outside the US. For instance, a foreign national investor has to be qualified before viewing the particular project information on the website.
Any legitimate regional center should be forthcoming and transparent about specifics of their past and current projects. While I do not practice SEC regulatory law, I do not think having project information details on their website violates any SEC laws. I am sure that any website will have a disclaimer stating that the information provided in their website is for information purposes only, not intended to sell any securities from that website, and that in order for the investment to be valid, the prospectus, partnership agreements, etc. must be reviewed and signed.
This is a good question, with a more complicated answer than you may realize.
Prior to the passage of the JOBS Act earlier this year, in order to qualify for the Regulation D exemption, an issuer (like a Regional Center or its affiliate) could not conduct any general solicitation or advertising regarding its current offering, including advertising about its current project. To be safe, many securities lawyers advised their clients not to post information about their current offerings on their website. This could be construed as a general solicitation, thereby violating the Regulation D exemption, which could have disastrous consequences for the Issuer, especially if Regulation S exemption was also unavailable.
The JOBS Act explicitly removed the prohibition on general solicitation in Reg D Offerings, however the SEC has not promulgated new rules and regulations putting this aspect of the JOBS Act into effect. In the SEC''s proposed rules regarding this matter, the SEC will require a higher burden of proof that all investors are "accredited" if the Issuer conducted a general solicitation in connection with its offering. Thus, listing current projects on your website may subject you to additional scrutiny. (Accredited Investors are investors who have met either an income or assets minimum threshold. Feel free to follow up with me if you want more specific information regarding the accredited investor thresholds.) There may be additional obligations inserted into the rules when the proposed rules become final. Furthermore, Regulation S (the other popular EB5 exemption) prohibits any directed sales efforts inside the United States.
Since the website can viewed in the U.S., providing information about your projects on your website might be viewed as a "directed sales effort" in the United States. This would violate Reg S. Thus, providing online information about your current projects may have the effect of increasing your scrutiny regarding your Regulation D exemption and eliminating the availability of the Regulation S exemption. Therefore, the best course of action at this time is to not disclose information on your website about your projects that is publicly available.
It is possible to password protect the portion of your site describing new projects and require investors to contact you for the password. In this way, you can confirm that such potential investors are accredited and that they are not viewing your website from within the U.S. Finally, you should consider contacting a securities attorney to review your website for general securities compliance and to confirm that the proper securities law disclaimers are in place. I hope this helps.
Unfortunately, it depends on how they list it, when they list it, and who can view the website (ie, is it password protected).
As a rule of thumb, EB-5 projects cannot do any sort of advertising or marketing on US soil, as they may be in violation of SEC rules.??You should consult an EB-5 Attorney and I may be reached at.
Yes it''s legal.
It''s legal for them to identify their projects online.
SEC regulations prohibit the posting of information about a specific investment opportunity on the web unless it is password protected. Loggin information can only be provided to individuals that have been determined to be "accredited investors." Website advertising can be considered general solicitation and is not permitted if the issuer of securities intends to rely on either the safe harbor of Rule 506 of Regulation D OR Section 4(2) of the Securities Act of 1933. These rules may differ for individuals relying on the exemption provided under Regulation S of the Securities Act. However, it is important to keep in mind that Regulation S only applies where the offer and sale of securities is not made within the U.S. and is not always available. The rules regarding general solicitation will change with the implementation of the JOBS Act by the SEC, however, that has been delayed until at least the end of August. Regional Centers and Project Principals currently undertaking an offering should consult with experienced securities counsel to understand the manner in which they may offer and market their securities.
No. Not their offerings. But when the EB-5 investment project closes, they can list the closed projects.
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