Investing

SEC Charges Lawyers Acting as Unregistered Brokers

Chris Lange

Published: December 7, 2015 1:45 pm

Last Updated: January 13, 2020 4:22 pm

The U.S. Securities and Exchange Commission (SEC) announced a series of enforcement actions against lawyers across the United States charged with offering EB-5 investments while not registered to act as brokers.

In one case in particular, the lawyer and his firm are charged with defrauding foreign investors in the government’s EB-5 Immigrant Investor Program, through which they seek a path to U.S. residency by investing in a specific project that creates or preserves at least 10 jobs for U.S. workers.

In a complaint filed in federal district court in Los Angeles, the SEC alleges that New York-based immigration attorney Hui Feng and the Law Offices of Feng & Associates not only acted as unregistered brokers by selling EB-5 investments to more than 100 investors, but they also defrauded clients by failing to disclose they received commissions on the investments in breach of their fiduciary and legal duties. Allegedly, the firm also defrauded some entities offering the EB-5 investments.

Andrew J. Ceresney, director of the SEC Enforcement Division, said:

Individuals and entities performing certain services and receiving commissions must be registered to legally operate as securities brokers if they’re raising money for EB-5 projects. The lawyers in these cases allegedly received commissions for selling, recommending, and facilitating EB-5 investments, and they are being held accountable for disregarding the relevant securities laws and regulations.

Without admitting or denying the findings, the following individuals and firms agreed to cease and desist from acting as unregistered brokers:

• Austin, Texas-based Mehron P. Azarmehr and Azarmehr Law Group, who agreed to pay disgorgement of $30,000, prejudgment interest of $2,965 and a penalty of $25,000.
• Miami-based Michael A. Bander and Bander Law Firm, who agreed to pay disgorgement of $228,750, prejudgment interest of $19,434 and a penalty of $25,000.
• Miami-based attorney Roger A. Bernstein, who agreed to pay disgorgement of $132,500 and prejudgment interest of $8,243.
• Hoboken, N.J.-based attorney Allen E. Kaye.
• Los Angeles-based attorney Taraneh Khorrami, who agreed to pay disgorgement of $60,000, prejudgment interest of $7,843 and a penalty of $25,000.
• Los Angeles-based Mike S. Manesh and Manesh & Mizrahi, who agreed to pay disgorgement of $85,000 and prejudgment interest of $11,159.
• China-based resident Kefei Wang, who agreed to pay disgorgement of $40,000, prejudgment interest of $1,590 and a penalty of $25,000.