SEC Earns Kudos In Foreign Investor Case

April 24, 2013

On February 6, 2013, the Securities And Exchange Commission ("SEC") filed a Complaint in federal court in the Northern District of Illinois charging Anshoo R. Sethi and two companies he created in Chicago (A Chicago Convention Center, LLC and Intercontinental Regional Center Trust of Chicago, LLC) with selling over $147 million in securities to purportedly finance the construction of a hotel and conference center near O'Hare Airport. The SEC alleged that Sethi and his companies misled foreign investors into believing that their investments were simultaneously enhancing their prospects for U.S. citizenship through the EB-5 Immigrant Investor Pilot Program, which provides foreign investors an avenue to U.S. residency by investing in domestic projects that will create or preserve a minimum number of jobs for U.S. workers. 

The federal court granted the SEC an  emergency order freezing investor assets that were at risk of being misappropriated. Sethi and his companies then terminated the offering and consented to the SEC's motion to return all of the funds held in escrow to investors.

On April 19, 2013, U.S. District Court Judge Amy St. Eve modified the asset freeze order and directed the return of more than $147 million in escrowed funds to investors. The litigation continues as the SEC seeks further monetary relief and permanent injunctions against Sethi and his companies.

Kudos to the SEC for its prompt handling of this matter!  This should be a template for future investigations and prosecutions.