Phoenix American Hospitality: Securities Investigation

Have you suffered investment losses in American Hospitality Properties Fund III, sponsored by Phoenix American Hospitality? 

The White Law Group is investigating potential FINRA lawsuits related to Phoenix American Hospitality funds and whether brokerage firms may have unsuitably recommended these private placement offering to investors.

Understanding Phoenix American Hospitality

Phoenix American Hospitality (PAH) is reportedly an opportunistic hotel fund manager, according to its website. The company reportedly purchases hotels in areas where anticipated new construction is difficult due to high construction costs, availability of top-tier franchises have already been identified and future hotel zoning sites do not present competition.

The company filed a form D to raise capital from investors with the offering American Hospitality Properties Fund III in 2016. The total amount of the offering sold was purportedly $50,000,000. The sales commissions and fees were estimated at 10% of the offering amount.

Investments such as these are typically sold by brokerage firms in exchange for a large up front commission. High fees can range from 7-10%, as well as additional “due diligence fees” that can range from 1-3%.

The problem with private placement investments such as American Hospitality Properties Fund III is that they typically involve a high degree of risk. They are also often sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds.

Did Your Broker Unsuitably Recommend a Phoenix American Hospitality Fund to you?

Under the SEC’s “Regulation Best Interest” standard, brokerage firms must conduct due diligence before recommending investments. If a financial advisor fails to assess risk suitability and investors suffer losses, they may have grounds for a complaint or lawsuit.

Lawsuit Options: FINRA Arbitration vs. Class Action

Investors considering legal action may wonder whether a class action lawsuit or an individual FINRA arbitration claim is the better option. Typically:

• FINRA Arbitration is often more suitable for investors with losses exceeding $100,000.
• Class Action Lawsuits are usually pursued when numerous investors have small claims that are impractical to litigate individually.

Filing a Lawsuit for Losses in American Hospitality Properties Fund III

If you have concerns about your investment in Phoenix American Hospitality offerings, you may be able to recover losses through a FINRA arbitration claim. The White Law Group represents investors nationwide in securities arbitration cases.

For a free consultation, call 888-637-5510 to discuss your legal options with an experienced securities fraud attorney.

About The White Law Group

The White Law Group is a national securities fraud and investor protection law firm with offices in Chicago, Illinois, and Seattle, Washington. The firm represents investors in claims against brokerage firms through FINRA arbitration. Visit our homepage to learn more about investor recovery options.