Prevail Capital granted approval to engage in EB-5 Investment Securities transactions
Prevail Capital LLC (Prevail), a FINRA registered broker-dealer, announces that, on August 15, 2014, the company was granted approval to engage in EB-5 Investment Securities Transactions.
Naples, Florida September 06, 2014
The EB-5 Immigrant Investor Program administered by the U.S. Citizenship and Immigration Service (USCIS) offers visas allowing residence in the United States to qualified immigrants who make an investment of at least $1,000,000 (or at least $500,000 for investments made in a “Targeted Employment Area”) in a new commercial enterprise that each will create not less than ten full-time jobs, or maintain the existing number of employees in a “troubled business.”
Because capital contributed by foreign nationals under the EB-5 Program typically takes the form of an investment in a limited partnership, the SEC has advised that EB-5 investment offerings are subject to U.S. securities laws, even though EB-5 investments may be mostly offered outside the United States to non-US Residents. As such, the EB-5 Industry is under increasing scrutiny.
In September 2013, FINRA released an interpretive letter giving guidance to broker dealers who are involved in securities transactions in connection with the EB-5 Program. FINRA’s guidance has had far-reaching implications for broker-dealers engaged in the marketing of EB-5 offerings. FINRA member broker-dealers who recommend EB-5 investments are now required to perform heightened due diligence with respect to immigration matters, and to both understand and advise prospective foreign investors regarding an EB-5 offering’s compliance.
As a result of FINRA’s guidance, and in order to engage in EB-5 Securities transactions, Prevail applied to FINRA for a modification of their Continuing Membership Agreement (CMA), an application process which lasted approximately 12 months. Importantly, correspondence with FINRA, throughout the application process, has provided Prevail with a comprehensive understanding of its capabilities and insight into where it stands in the regulatory space. As such, Prevail believes that the same rules likely apply industry-wide and that other broker-dealers will need to submit updated CMAs over the coming years, if they intend to be involved in and compliant with EB-5 securities business.
About Prevail Capital LLC:
Prevail Capital, LLC, member FINRA/SIPC, is a privately held financial services firm providing investment banking, mergers & acquisitions, management consulting, private placements of securities and EB-5 securities transactions to clients throughout the United States, Asia, Europe and the Middle East.