Jackie, If you meet the guidelines of the Issuer Exemption 3a(4)-1, then you are in the clear as it provides for a non-exclusive safe harbor. Can you give us a sense of what might be deemed outside of that exemption? Is it something along the lines of say, "The speed limit is 60 miles per hour, so I'm not going to recommend that anyone drive 62, even though I think it'd be fine.” Is that the way you approach it?
Jackie Prester: It's a gray area. Unfortunately, if you fall outside the safe harbor, which I think most regional centers and most people that are involved in EB5 offerings do because of the 12-month limitation, then you're stuck with facts and circumstances. The SEC is not going to give you a black line kind of assurance that “yes, you're a broker-dealer” or “no, you're not.” So it becomes really a risk analysis of how can you contain the risk or reduce it.
Let me make a couple of key points. Say you hire a third-party broker-dealer and that broker-dealer is out there acting on your behalf, doing all the solicitation activities. Meanwhile the individuals who are running the NCE and the regional center are truly doing administrative activities. You should be golden because you've got a registered broker-dealer actually doing all the solicitations.
Now, for a number of folks, for whatever reason, that’s not a viable option and so individuals who are actually part of the EB5 regional center are going to be involved in solicitation activities. A lightning rod for the SEC is how the compensation flows. When you've got individuals who have what the SEC calls "a salesman's stake in raising the funds", then in the SEC's view, that fact alone and regardless of all else indicates the individuals and their company is engaged in the business of a broker-dealer, and you're probably going to get tagged with the broker-dealer label.
So if, for example, you've got unregistered persons who get compensated based on the number of investors they bring in or a percentage of the funds raised, there is a high level of risk. We encourage our clients to ensure that anyone who is not registered as a broker-dealer be primarily engaged for activities other than soliciting invesetors, such as the EB5 Regional Center and its personnel engaging in EB5 administrative activities and being compensated based on the services they provide, not being compensated based on soliciting investors or raising capital. They're getting compensated from the deal; maybe it's on the back end, based on the revenues, and not on the front end, based upon how much capital is raised.
Those are some of the ways to try to reduce the overall risk of being deemed a broker-dealer.