Investor Alert: Lotus Domaine III LP
The White Law Group is investigating potential FINRA arbitration claims involving brokerage firms that may have improperly recommended investments in Lotus Domaine III LP, a Regulation D private placement.
About the Offering – Lotus Domaine III LP
According to a Form D filed with the Securities and Exchange Commission (SEC), Lotus Domaine III LP is a Delaware limited partnership formed in 2020. The firm lists its principal place of business as Newport Beach, California.
The offering, filed under Rule 506(b) of Regulation D, was structured as a pooled investment fund and classified as a private equity fund. As of the amended filing dated August 5, 2021, the issuer reported raising $34,004,359 from 34 investors.
Broker-Dealers Involved in the Offering
Skystone Securities, LLC (CRD#: 131953), Castle Hill Capital Partners, Inc. (CRD#: 44131), and Phoenix Strategic Capital LLC were listed as participating broker-dealers in the offering. These firms reportedly helped solicit investors across more than 30 states, including California, New York, Texas, and Florida.
Although the Form D reported no specific sales commissions, it flagged those amounts as “estimates,” meaning commissions may have been paid but not disclosed with precision.
Risks of Investing in Regulation D Offerings
Investments in private placements like Lotus Domaine III LP can involve substantial risks, especially for retail investors who are not adequately informed. Common risks include:
- Lack of Liquidity – These investments are not traded on public markets and may be difficult to sell.
- High Commissions and Fees – Broker incentives can create conflicts of interest and reduce net returns.
- Limited Transparency – Issuers are not required to provide regular financial disclosures or undergo audits.
- Speculative Nature – Projects may underperform, especially in niche real estate or private equity sectors.
Broker Due Diligence Obligations
FINRA-registered broker-dealers have a duty to perform adequate due diligence before recommending any investment to their clients. This includes:
- Investigating the issuer’s background, financial condition, and business operations;
- Disclosing all material risks, fees, and conflicts of interest;
- Ensuring that the investment is suitable for each individual investor based on their risk profile and investment objectives.
If a broker fails to fulfill these obligations, investors may have legal grounds to recover their losses.
FINRA Arbitration vs. Class Action
If you invested in Lotus Domaine III LP based on a broker’s recommendation and have suffered financial losses, you may be able to pursue a recovery claim through FINRA arbitration. Unlike class actions, FINRA arbitration provides an individualized forum to resolve securities disputes and often results in a faster resolution.
The White Law Group has represented hundreds of investors in FINRA arbitration claims involving high-risk Regulation D offerings.
Free Case Evaluation
If you believe your broker failed to perform due diligence or misrepresented the risks of Lotus Domaine III LP, please call The White Law Group at (888) 637-5510 for a free consultation.
For more information, visit www.whitesecuritieslaw.com.
Frequently Asked Questions (FAQs) : Lotus Domaine III LP
1. What is Lotus Domaine III LP?
It is a private equity fund formed in 2020 in Delaware that raised over $34 million through a Regulation D exempt offering.
2. Who sold the investment and how much was raised?
The offering raised $34 million from 34 investors. Broker-dealers such as Skystone Securities and Castle Hill Capital Partners were involved in soliciting the investment.
3. Can I recover losses from this investment?
Possibly. If your broker failed to disclose the risks or did not conduct proper due diligence, you may be eligible to pursue a FINRA arbitration claim to recover your losses.
Last modified: August 6, 2025
