Comment: Attorney Risks

There are at least three distinct factors that go into the decision to make an EB-5 investment, and there are three distinct kinds of licensed experts that can advise investors about them.

1) Structured Finance:
To evaluate an EB-5 investment one needs to be proficient in the field of Structured Finance. One needs to evaluate the overall financial structure for the project, and see where the EB-5 portion fits in. For example, consider the following three aspects of Structured Finance.
• Inter-creditor Agreement(s), especially Subordination Clauses: An EB-5 investment has multiple sources of capital: typically banks in a senior position, EB-5 sharing the mezzanine position with other mezzanine investments, such as preferred equity, bridge loans etc. Subordination clauses govern the relative place and priorities of various investments. These clauses can be very simple or very complicated or something in between - and are usually part of an "Inter-creditor Agreement" which could run into dozens of pages.
• Underlying Asset in the deal terms/structure: EB-5 investments have a complex structure. One needs to determine the value of the NCE's agreement with the JCE, especially as regards to what assets are pledged toward the NCE's loan. Sometimes the loan is secured by a hard asset such as land/buildings, sometimes the equity of the JCE, which may or may not have any value in liquidation proceedings and sometimes debt possessed by the JCE, which could also be of questionable value in a work-out.
• Various entities affecting the investor: We understand that large projects in New York/Los Angeles/etc, have structures which involve more than a dozen interacting entities, intimately affecting the NCE and JCE, --and deal structures which require a combination of a mining engineer, cartographer and a mini-Einstein to grasp.
Structured Finance is a distinct area of law that takes many years to master. Expertise in that field is needed to understand EB-5 investments qua investments--and that should be left to those who have the expertise to untangle the agreements, the clauses, the terms, the structures and the assets and their relationship to an EB-5 investor to be able to suggest an EB-5 security to an investor.

2) Financial Evaluation:
Professionals giving financial advice are regulated by SEC. They are trained to evaluate investments on several criteria such as:
• Suitability: Evaluating suitability of the investment for an investor is exactly what a FINRA registered financial advisor is trained and registered to do. It is a complex skill obligating the advisor to adhere to certain professional standards, which are set by SEC and FINRA.
• Location: Simply looking at a record or reputation of a developer, or the nature or location of the project is entirely inadequate to evaluate a real estate investment. A developer with an illustrious record with a great location and a successful project can still have a lousy investment opportunity depending on the price.
• Real Estate Expertise: Buying and selling homes is not a qualification for evaluating the real estate value of a hotel in Los Angeles, a residential tower in Manhattan or an assisted living facility in Florida. There are distinct sectors and sub-sectors in the real estate market, each with their own expertise.
Giving financial advice without a FINRA license is a violation of SEC rules, and is not covered by typical legal malpractice insurance that immigration attorneys carry and leads to personal liability

3) Immigration Risks:
Immigration attorneys can certainly evaluate the job cushions for the project, calculate how many jobs have been created based on the models used etc. They can distinguish projects based on whether the job cushion is 400% or 4% etc.

Probably the optimal structure is the financial adviser quarterbacking the advice--bringing in experts in Structured Finance and Immigration law as needed. By unwittingly usurping all three functions, and making suggestions to clients on the choice of EB-5 investments, or giving clients a short list of “good’ or "reputable" projects or Regional Centers, immigration attorneys risk their law licenses, expensive litigation, and their personal assets by violating the SEC laws against investment advice. Advising investors on financial viability of an investment without having a FINRA license is a violation of SEC laws, and such violations are not covered by standard malpractice insurance policies most attorneys carry, even EB-5 specific insurance, which is for legal advice and not for financial advice. Though Chinese investors have not been litigious, that is not the case the Indian or other nationalities that dominate today's EB-5 market. Taking this large a risk for a relatively small legal fee such as $25,000 makes no economic sense, since the risks are more than 10 times to 30 times larger than that. Don’t be sorry, be safe.

Comment: AILA 2019 Elections

One of the free services that newspapers offer their readership is coverage of governance issues. For newspapers serving the professions in the USA, this frequently means covering not just happenings in government concerning regulation affecting readers (as distinct from readers' clients), but also covering happenings in the professional associations serving a particular profession. In the case of Immigration Daily and the immigration lawyer community, this means covering events of particular note in AILA governance. Consistent with this general tradition, we have invariably offered all candidates to competitive offices in AILA elections access to our readers - to get the word out about matters which they wish to engage the immigration bar on. This is a free service, and we have never charged for it, nor will we ever charge any candidate for distribution of their campaign material.

The 2019 election season for competitive AILA offices has started. Today we are carrying campaign material from 6 out of the 12 candidates for office, we will add more candidates' material as it comes in to us - so readers will have access to statements in order to make an informed decision.

Statements submitted from candidates running for AILA Board of Governors: Alexis S. Axelrad , Ally Bolour , Amanda Bethea Keaveny , Tracie L. Klinke , Andrew Neitor and Sarah K. Peterson .

The following candidates for Board of Governors are yet to send in their Statements: Rekha Sharma-Crawford, Tammy Fox-Isicoff, Maggie M. Murphy, Gregory H. Siskind, Hardeep "Dee" Sull and Marc Van der Hout; We will carry statements from any or all of these as and when their statements come in.

To make your informed decision and vote please click here.

Article: Making the Case for Expanding a Foreign National’s Interest in an I-140 Petition By Cyrus D. Mehta and Patrick Matutina

Blogging: Federal Judge Finds Violations of H-2A Visa Program and MSPA By Bruce Buchanan

Blogging: Appalling Cuccinelli USCIS appointment and social media surveillance herald even more biased RFE's and visa denials, moving US legal immigration toward white supremacy and fascism By Roger Algase

Blogging: Illegal immigration, by the numbers: Visa violators and border crossers By Nolan Rappaport

News: New Zealand Nationals Eligible for E-1 and E-2 Nonimmigrant Classifications

Focus: PERM Illuminated - Hot Off the Presses
Joel Stewart has done something remarkable in the new edition of THE PERM BOOK 2017-18 Edition. He has taken the spaghetti of all the sources on PERM: legislations, rules, FAQs, cases etc. and reintegrated them into a simple and luminously logical progression of how to do PERM. In each of the chapters, he uses articles by notable practitioners and his own extensive commentary to provide deep insights on every aspect of PERM. If you are a seasoned PERM practitioner, you will appreciate the clarity of the organization seen in the table of contents below, and will discover many new insights in every chapter. For anyone relatively new to PERM, Joel Stewart serves as a trusted guide to your mastering the lay of the land of this complex area. This book belongs in the library shelf of every PERM practitioner. Get your copy now, here:

Book includes: Chapter 1: All About the Law, Chapter 2: Parties to PERM, Chapter 3: Legal Requirements, Chapter 4: Anomalies: Special Handling or Processing, Chapter 5: Educational Degrees as Requirements, Chapter 6: Job Offers, Chapter 7: Prevailing Wage Requests, Chapter 8: All About Recruitment, Chapter 9: Consideration of Job Applicants, Chapter 10: All About Filin, Chapter 11: Post Filing Issues, Chapter 12: Approvals: Expiration, Validity, Portability & Duplicates, Chapter 13: Denials, Chapter 14: Request for Reconsideration, Chapter 15: Introduction to BALCA, Chapter 16: How to Request Review at BALCA, Chapter 17: Consideration by BALC, Chapter 18: BALCA Can Remand, Chapter 19: Disciplinary Measures, Chapter 20: DOL Organization and Updates, Acknowledgements, The PERM Book Online Library.

Get your copy of THE PERM BOOK 2017-2018 edition Now, Here:

For additional information, including author biographies and purchase information, please see:
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Headline: Trump Gives Hard-Liner Ken Cuccinelli Top Immigration Job Despite Bipartisan Opposition Click here
Headline: The contradiction at the heart of immigration restriction Click here
Headline: Public policy expert: US has become 'outlier' on immigration practices Click here
Headline: U.S. Immigration Courts Are Broken. These 5 Charts Show Why Click here
Headline: What's behind the spike in immigrants at the border Click here

Letters of the Week

ComingsNGoings: Immigration Event
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