To discover whether an attorney is affiliated with an EB-5 regional center, simply ask the attorney whether they are affiliated with, compensated by, or working for the regional center.
If a regional center offers a list of recommended attorneys, this does not mean the attorneys listed work for or with the regional center. The EB-5 program is a complex aspect of immigration law, so not all immigration attorneys have experience with the program. Regional centers simply prefer working with EB-5 immigration attorneys who they know have the necessary experience to navigate the program and make attorneys’ names available for the convenience of investors.
If an immigration attorney represents both an individual EB-5 investor and the EB-5 regional center through which the investor wants to make an EB-5 investment, conflicts of interest can arise. Because of this, the Securities and Exchange Commission (SEC) emphasizes the need for separate legal representation. In fact, in certain cases of dual representation, the SEC and American Bar Association (ABA) may sanction the attorney.
Dual representation can cause several problems. Securities issuers, which include EB-5 regional centers, may not misrepresent any information, either by providing false information or by omitting key information. Those guilty of misrepresentation face grave consequences from the SEC. When the same attorney represents both parties to a transaction, the attorney may face challenges related to disclosure, which can lead to misrepresentation.
Other problems related to dual representation include misalignment of the investor’s and regional center’s timelines for releasing investor funds, and conflicts arising from representation in legal action related to the misuse of funds. Because EB5 investment participants and regional center operators have different goals, conflicts of interest could easily arise. If a conflict were to arise, both parties would have to retain new counsel. To avoid potential problems and delays, EB-5 investors should retain separate counsel from the outset.