SEC Whistleblower Program as a Valuable EB-5 Securities Anti-Fraud Enforcement Tool
June 21, 2018
EB-5 immigrant investors have few protections against fraud and other bad acts committed by regional center operators and related parties. Since 2015, the EB5 industry has successfully repelled various legislative reform proposals by Congress that would have imposed integrity measures, if enacted into law. The most important of these measures, third-party fund administration and account transparency, were aimed at detecting and curbing these abuses much earlier than might otherwise be possible. Fortunately, the SEC Whistleblower Program (sometimes referred to as the “Program”) has proven to be a powerful weapon in the SEC’s toolbox to combat securities fraud in the EB-5 arena and to provide an avenue for EB-5 investors to obtain relief. The Program authorizes the SEC (sometimes referred to as the “Commission”) to make monetary awards to eligible individuals who voluntarily provide original information that leads to successful judicial enforcement or administrative actions4 brought by the SEC resulting in monetary sanctions over $1 million.
In March 2018, the SEC paid nearly $83 million in awards to three whistleblowers who provided tips leading to a SEC administrative order against Merrill Lynch for violations of the federal securities laws in which the SEC collected $415 million. These awards represented the largest awards in the history of the Program. We expect that in the coming months the SEC will pay another large award to one or more whistleblowers who provided the tips that led to the uncovering of the massive EB-5 securities fraud in connection with the Jay Peak ski resort and related projects. In February 2018, monetary sanctions totaling almost $84 million were imposed upon Ariel Quiros, the chairman of Jay Peak.
Subscribe for News
This website is for informational purposes only and does not constitute an offer or solicitation to sell shares or securities. Any such offer or solicitation will be made only by means of an investment's confidential Offering Memorandum and in accordance with the terms of all applicable securities and other laws. This website does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in any connection with, any contract or commitment whatsoever. EB5Projects.com LLC and its affiliates expressly disclaim any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained in the website, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting therefrom.