Concurrent Filing as a Case Study in Risk and Regulation
The EB-5 Immigrant Investor Program (EB-5 Program) sits at a unique intersection of U.S. immigration and securities law. It is both an immigration pathway and a capital markets mechanism—foreign investors provide job-creating funding to U.S. projects in exchange for a pathway to permanent residence. Courts and regulators have long confirmed that EB-5 investments are securities, and the EB-5 Reform and Integrity Act of 2022 (RIA) codified that reality by embedding securities compliance directly into statutory requirements [1].
As explained in the prior section on immigration timing, concurrent filing is more than just a procedural change. From a securities standpoint, it often acts as the trigger that shifts EB-5 offerings into the U.S. market. When that occurs, offshore registration safe harbors like Regulation S are frequently unavailable, and issuers must look to domestic exemptions such as Regulation D. Just as importantly, it makes broker-dealers the hub of lawful compensation. This article focuses on those primary consequences while recognizing that other fact patterns or exemptions may lead to different analyses.
The central theme of what follows is compliance. The RIA did not just add new forms or procedures; it reshaped how responsibility for compliance risk is distributed across the EB-5 ecosystem. Understanding who carries those risks, and how they can be managed, is essential for issuers, regional centers, and promoters alike.
EB-5 and Securities Compliance
The Immigration and Nationality Act (INA) created the EB-5 Program to facilitate immigration by stimulating job creation through foreign capital investment [2]. The mechanism, however, is unmistakably financial. EB-5 investments have always been subject to the securities regulatory framework. Investors may pursue permanent residence, but they are also purchasing securities, and the compliance obligations that flow from that fact are significant.
Courts have consistently applied the Howey test to EB-5, holding that these arrangements are “investment contracts” and therefore subject to the federal securities laws [3]. In SEC v. Hui Feng, the Ninth Circuit reaffirmed that an investor’s immigration motive does not negate the economic reality of EB-5 securities transactions [4]. The RIA did not change that fundamental principle. What it did was add new layers of accountability, most notably by making regional centers responsible for securities compliance in addition to their immigration compliance role. Congress recognized that investor protection is inseparable from EB-5 Program credibility. As a result, the role of regional centers in EB-5 is now firmly situated within the securities regulatory framework alongside that of issuers. Compliance in this space is not incidental—it is foundational, and the question becomes how those responsibilities are allocated among the key actors in the EB-5 Program.
Securities Compliance Responsibilities
The RIA environment clarifies and sharpens how compliance responsibilities are divided among three primary actors in EB-5 transactions: issuers, regional centers, and promoters.
Issuers bear the heaviest responsibility. Most EB-5 offerings rely on registration exemptions—typically Regulation D for domestic sales and Regulation S for offshore sales. With concurrent filing, however, Regulation S is often unavailable because investors are physically present in the U.S. when they subscribe, leaving Regulation D as the primary path [5]. This places issuers squarely within the conventional securities framework, with obligations that mirror those faced by other private placement sponsors. Issuers also must avoid Rule 10b-5 violations, which prohibit material misstatements or omissions under federal securities law [6]. Disclosures must be comprehensive and accurate, and offering documents must reflect investor protection standards seen in conventional securities offerings. Moreover, issuers cannot pay transaction-based compensation to unregistered parties. Engaging such “finders” exposes issuers to liability under 15 U.S.C. § 78o(a)(1), a rule that has made broker-dealer participation one of the few reliable ways to lawfully structure compensation [7].
Consider, for instance, an issuer that pays a foreign migration agent a success fee for a U.S.-based investor without routing it through a broker-dealer. Even if the transaction originated abroad, once the investor executes documents in the U.S., the issuer could be liable for unlicensed brokerage activity [8]. The SEC has consistently stressed that “substance over form” governs its analysis, meaning that labels or geography do not matter as much as the actual conduct [9]. If the activities look like brokerage, they will be treated as such, and liability follows.
Regional centers are not “issuers” per se, but their regulatory responsibilities have expanded significantly under the RIA. They must maintain written policies for securities compliance, certify compliance annually to USCIS, and oversee promoters [10]. Noncompliance risks suspension or termination of regional center designation, with serious consequences for investors and projects alike. In practice, this means regional centers now function more like compliance departments within financial institutions. They are expected to track promoter registrations, maintain internal audit trails, and ensure that offering materials satisfy both USCIS and SEC standards. This bridging role—spanning both immigration oversight and securities law—is
new, and it requires resources and expertise that many centers are still in the process of developing.
Promoters, too, face new obligations that complete the compliance chain. The RIA introduced Form I-956K (Registration for Direct and Third-Party Promoters), requiring USCIS registration before engaging investors. Promoters must disclose their identity, compensation terms, and a written agreement with the issuer or regional center [11]. Failure to register can invalidate investor petitions and trigger securities enforcement—risks underscored in the SEC’s case against Hui Feng, which confirmed that transaction-based compensation without broker-dealer involvement violates securities law.
Taken together, these overlapping responsibilities show that each participant—issuer, regional center, and promoter—carry obligations that reinforce one another. A lapse at any point can put the entire EB-5 Program at risk. This sets the stage for examining the role of broker-dealers, who function as compliance gatekeepers in many EB-5 offerings.
Broker-Dealers as Compliance Gatekeepers
If issuers, regional centers, and promoters form the compliance framework, broker-dealers often function as the hinge that keeps it moving in practice. Because they are subject to SEC registration and FINRA oversight, they are already built to manage compliance risk. Broker-dealers bring critical compliance infrastructure—supervision, AML/KYC checks, suitability review, and lawful structuring of compensation. By anchoring EB-5 offerings within established securities frameworks, broker-dealers provide a level of rigor that can strengthen both investor confidence and the EB-5 Program’s long-term credibility.
This role is especially visible when issuers work with foreign migration agents. The SEC has made clear that paying transaction-based compensation to unregistered parties violates Section 15(a)(1) of the Exchange Act [12]. By routing such payments through registered broker-dealers, issuers reduce their exposure and align with established securities practice. Broker-dealers also contribute beyond compensation. Their due diligence processes [13] can strengthen offering materials, improve risk disclosure, and help guard against Rule 10b-5 violations. In practice, broker-dealer participation helps prevent compliance breakdowns and adds a layer of oversight that protects both issuers and investors. But their involvement does not absolve issuers, regional centers, or promoters of liability; ultimate responsibility remains with those actors. The importance of this gatekeeping role becomes clearer when viewed through the real-world example of concurrent filing.
Concurrent Filing — A Case Study in Triggering Securities Obligations
Concurrent filing—filing Form I-526E and Form I-485 at the same time—has become more common among EB-5 investors already in the United States. While attractive as an immigration strategy, it also reshapes the securities landscape by pulling many offerings into U.S. jurisdiction. These investors value the ability to remain in the country while petitions are pending. But their physical presence means that the EB-5 offering is treated as domestic, and thus subject to SEC oversight.
This shift has direct consequences for Regulation S, which applies only when both the offer and the sale occur offshore, and the investor is outside the United States. If the investor is in the U.S. at the time of subscription, the safe harbor disappears— raising the risk of unregistered offering violations under the Securities Act. For example, consider a Chinese national in the U.S. on an H-1B visa who signs a subscription agreement while in California. Even if the project was marketed entirely overseas, the SEC would likely treat the transaction as domestic, making Regulation S unavailable. Market participants sometimes talk about “landing and filing” strategies or the State Department’s “90-day rule” to manage immigration risk. These doctrines matter for admissibility, but they do not change the securities law analysis. From a compliance perspective, what matters most is the investor’s location at the time of offer and sale [14]. Even if negotiations and marketing took place abroad, once the subscription is executed inside the United States, Regulation S is generally unavailable, and the offering is treated as domestic.
The same logic applies to compensation. Soliciting U.S.-based investors triggers obligations under 15 U.S.C. § 78o(a). Promoters who accept transaction-based fees without broker-dealer registration face liability and possible SEC enforcement, as seen in SEC v. Hui Feng. To comply, fees tied to U.S. investors must flow through a registered broker-dealer [15].
This is why coordination between immigration and securities counsel is essential. A “clean” adjustment application that ignores securities law—or a securities-compliant structure that creates immigration exposure—will frustrate investor objectives. Joint planning aligns both regimes: immigration counsel manages admissibility and timing, while securities counsel ensures compliance with the Securities Act, the Exchange Act, and FINRA requirements. Together, they protect investors while reinforcing the integrity of the EB-5 Program.
In practice, concurrent filing offers immigration advantages but magnifies compliance obligations. To mitigate risk, issuers, regional centers, and promoters should adopt integrated practices that address both investor protection and regulatory scrutiny. At a minimum, this means: (1) documenting the investor’s location at offer and sale; (2) routing all success fees tied to U.S. investors through licensed broker-dealers; (3) enhancing disclosures with clear information about promoter compensation and conflicts of interest; (4) and coordinating immigration and securities strategies so that both regimes are satisfied. It also requires maintaining compliance with USCIS requirements, such as Form I-956K and annual certifications, while meeting SEC and FINRA standards. Finally, regional centers and issuers must adopt integrated manuals and processes that capture both securities and immigration requirements, creating a unified compliance record that demonstrates good faith to regulators and provides a defensible position in the event of inquiry. Managed carefully, concurrent filing can expand opportunities for investors; handled carelessly, it can invite parallel enforcement by USCIS and the SEC.
Compliance as Foundation
Meeting the requirements of the RIA takes habits, not heroics. The objective is to create a resilient EB-5 marketplace that protects investors and funds lawful projects. That outcome is achievable with steady processes, experienced counsel, and practical compliance tools. The common thread is simple: treat compliance planning as foundational— and approach it as a shared effort where collaboration strengthens both compliance strategy and the EB-5 Program itself.
†The author wishes to thank Tanya Lawless and Anastasia Weston for their assistance in preparing this article. This article provides general information on recent developments in EB-5 compliance. It is not intended as, and should not be relied upon as, legal advice. Readers should consult qualified counsel regarding their particular circumstances.
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About the Author
Mariza McKee
Partner, Kutak Rock LLP
Chair, EB-5 Finance Practice Group
Mariza McKee is a structured finance lawyer and a trusted counselor to regional centers, new commercial enterprises, job-creating entities, and other stakeholders that raise and deploy EB-5 capital. She leads the firm’s national EB-5 finance practice—an interdisciplinary team of securities, tax, corporate, debt, and real estate lawyers. She approaches EB-5 transactions from a risk manager’s vantage point and constructs legal strategy to help clients achieve business objectives while navigating securities laws and evolving EB-5 Program requirements. A frequent speaker and writer on EB-5 and securities law considerations, Ms. McKee is an active member of the EB-5 community dedicated to elevating EB-5 industry practices and standards. Mariza served as a member of IIUSA’s Board of Directors. She also represents clients in a variety of other securities, commercial, and merger and acquisition matters.
References
[1] Immigration and Nationality Act (INA) § 203(b)(5), 8 U.S.C. § 1153(b)(5), as amended by EB-5 Reform and Integrity Act of 2022.
[2] INA § 203(b)(5), 8 U.S.C. § 1153(b)(5) (codified EB‑5).
[3] SEC v. W.J. Howey Co., 328 U.S. 293, 298–99 (1946).
[4] See SEC v. Hui Feng, 935 F.3d 721, 730–31 (9th Cir. 2019).
[5] 17 C.F.R. §230.506 (Regulation D) and§§ 230.901–905 (Regulation S).
[6] 17 C.F.R. § 240.10b-5.
[7] Securities Exchange Act of 1934 § 15(a), 15 U.S.C. § 78o(a).
[8] Securities Exchange Act of 1934§ 15(a), 15 U.S.C. § 78o(a); SEC, Guide to Broker-Dealer Registration (Apr. 2008), https://www.sec.gov/about/divisions-offices/division-trading-markets/division-trading-markets-compliance-guides/guide-broker-dealer-registration.
[9] See SEC v. Kramer, 778 F. Supp. 2d 1320 (M.D. Fla. 2011).
[10] USCIS Policy Manual, vol. 6, pt. G, chs. 4 and6 (Aug. 2025).
[11] 8 U.S.C. § 1153(b)(5)(K).
[12] FINRA Rule 2040, Payments to Unregistered Persons (2015), https://www.finra.org/rules-guidance/rulebooks/finra-rules/2040.
[13] FINRA Rule 3110, Supervision (2024), https://www.finra.org/rules-guidance/rulebooks/finra-rules/3110; FINRA Rule 2210, Communications with the Public (2019), https://www.finra.org/rules-guidance/rulebooks/finra-rules/2210; Securities Exchange Act of 1934 § 15(b)(4)(E), 15 U.S.C. § 78o(b)(4)(E).
[14] Securities Act of 1933 § 5, 15 U.S.C. § 77e; 17 C.F.R. § 230.901 (Regulation S safe harbor applies only when offer and sale occur offshore).
[15] See 15 U.S.C. § 78o(a)(1) (prohibiting any broker or dealer from making use of interstate commerce to effect securities transactions unless registered with the SEC); see also Hui Feng at731–32 (holding that immigration-related motives did not exempt EB-5 promoters from broker-dealer registration requirements when receiving transaction-based compensation).
