Unregistered-broker and commission claims.

A. The finder economy

Most EB-5 investors first hear about a project from an overseas agent, who is paid — often tens of thousands of dollars per investor — by the regional center or issuer once the investor commits or is approved. These payments are often invisible to the investor and large enough to influence both the advice the investor receives and the economics of the very project the investor is funding.

B. The registration requirement

A person who, for transaction-based compensation, solicits investors and effects securities transactions is generally a “broker” who must register or associate with a registered broker-dealer under Section 15(a) of the Exchange Act. The requirement applies to foreign agents that solicit U.S.-connected investors — particularly those that maintain U.S. offices or staff, or that solicit investors already present in the United States.

C. Ireeco and the finder actions

In its first EB-5 action of this kind, the SEC charged a finder operation that had rounded up more than 150 foreign investors — steering most of them into a handful of regional centers that paid it roughly $35,000 per investor — without ever registering as a broker-dealer. An administrative law judge later ordered more than $3 million in disgorgement. Months later, the SEC extended the theory to attorney-finders who sold EB-5 investments for undisclosed commissions.¹⁴

D. Remedies

Beyond SEC enforcement and disgorgement, registration and nondisclosure violations can open private avenues: contracts made in violation of the Exchange Act may, in some circumstances, be voidable, supporting rescission, and undisclosed commissions can support fraud and fiduciary claims. For investors, the finder's fee is often the first thread worth pulling: it measures how much of their capital never reached the project in the first place.