May-June 2012

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JUMP–S+ T on small companies that are in the process of raising capital. This article analyzes the new law's impact on the EB-5 industry. It is a very general summary of many complex securities law issues. Please consult your own professional advisors for advice applicable to your particular circumstances. he Jumpstart Our Business Startups (JOBS) Act, signed by President Barack Obama on April 5, 2012, aims to ease the regulatory burden EB-5 and Securities Law Before the JOBS Act One immediate misunderstanding is that the JOBS Act gives a regional center (or other EB-5 practitioners) a green light to ignore a Securities and Exchange Commission (SEC) lawyer's ranting. Do regional centers no longer need to comply with the securities laws? While the JOBS Act gives the regional center more leeway to market EB-5 securities, it does not exclude regional centers and the principals of EB-5 projects from continuing to comply with securities law. When you approach an investor to invest in your EB-5 project, you are engaged in the offer and sale of securities. This activity is regulated by state and federal securities laws, including the Securities Act of 1933 (1933 Act), which focuses on the offering and sale of securities; and the Exchange Act of 1934 (1934 Act), which addresses, among other things, the actions of issuers and broker- dealers in connection with selling securities. A general misconception from companies seeking to raise money via the EB-5 program is that securities law compliance should be a low priority. No doubt companies with this attitude are unaware that they are placing the funds they raise via EB-5 at risk of forfeiture to SEC and/or recovery by their investors. The 1933 Act requires that all offerings of securities be registered with SEC unless the offerings can be made pursuant to an exemption from registration. Registration BY YI SONG // EDITED BY CLEM TURNER What the

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