Prime Group Holdings LLC, a Saratoga Springs, New York-based private equity firm focused on alternative real estate asset classes, is distributing $21,941,064.97 to harmed investors following a Securities and Exchange Commission finding that the firm made materially misleading statements in the offering materials of Prime Storage Fund II, LP, a self-storage real estate fund that raised more than $500M beginning in 2017. The core of the SEC’s case was a conflict of interest that Prime Group’s fund documents concealed rather than disclosed: a 3% brokerage fee paid on every property acquisition that flowed not to an independent third party but to a real estate brokerage firm wholly owned by Robert J. Moser, Prime Group’s CEO.
Between 2017 and 2021, that affiliated brokerage collected nearly $18M in fees on the fund’s deal activity. Investors who asked directly about brokerage fees and affiliates in customized due diligence questionnaires received answers that denied both. The fund’s offering materials described all property sourcing as being done internally. The SEC charged Prime Group in September 2023, and the firm settled for $20,571,822 without admitting or denying the findings. With accrued interest, the disbursement approved on May 1, 2026 totals $21,941,064.97.
A Self-Storage Fund Built Its Deal Pipeline on a 3% Fee That Went to the CEO’s Own Brokerage
Prime Group launched Prime Storage Fund II in 2017 to acquire off-market self-storage facilities across North America. The fund relied on a network of employees and independent contractors to identify and source deals outside the traditional auction process. These sourcing teams were compensated in part through a 3% brokerage fee that the fund paid at the closing of each acquisition, routed through a real estate brokerage firm that was wholly owned by Moser.
The SEC’s order, issued on September 5, 2023, found that this brokerage firm was an affiliate of Prime Group under applicable securities law. The significance of that classification is straightforward: when a fund manager routes fees to an affiliate, investors must be told. Prime Group’s offering materials did not make this disclosure. Instead, the limited partnership agreement referenced the possibility that affiliated persons might provide services without identifying the brokerage fee arrangement specifically. The private placement memorandum disclosed a 1% acquisition fee and a 5% property management fee paid to an affiliate, but omitted the 3% brokerage fee entirely.
Investors Who Asked Specifically About Brokerage Fees and Affiliates Were Told Neither Existed
The disclosure failures extended beyond boilerplate omissions in offering documents. When prospective investors submitted customized due diligence questionnaires that asked specifically whether Prime Group used brokers and whether any fees were paid to affiliates, the answers they received were false. Prime Group denied the use of a broker and described all sourcing as being done internally. Both answers were incorrect at the time they were given.
According to the SEC’s press release, this pattern of denial in response to direct investor questions elevated what might otherwise have been a passive disclosure failure into active misrepresentation. The SEC charged the firm under Section 17(a)(2) of the Securities Act of 1933, a provision that can be satisfied by ordinary negligence and does not require proof of intentional fraud. No individuals were charged in the matter. Prime Group agreed to cease and desist from future violations and to pay the full settlement amount.
Nearly $18M in Fees Flowed to Moser’s Brokerage Over Four Years Across the Majority of Fund Transactions
The affiliated brokerage’s fee income was not incidental. Between 2017 and 2021, the firm received nearly $18M in brokerage fees from Prime Storage Fund II’s acquisitions, collected at closing on the majority of the fund’s transactions. The 3% rate applied on top of the separately disclosed 1% acquisition fee, meaning investors who believed they were tracking the fund’s fee load were missing a significant additional cost flowing to a firm controlled by their fund manager’s CEO.
The SEC’s Director of Enforcement noted that information about payments to affiliates and the conflicts of interest they create is critical to investor decision-making. The Prime Group case represented a situation where that information was not only absent from offering documents but actively contradicted in written responses to investor inquiries. The fund’s deal sourcing operation was presented as an internal capability of Prime Group when it was in fact generating substantial outside income for the CEO’s separately owned entity.
The $21.9M Disbursement Represents the Full $20.5M Settlement Plus Accrued Interest
Prime Group paid $11,510,625 in disgorgement, $2,561,197 in prejudgment interest, and a $6,500,000 civil penalty, totaling $20,571,822. The full amount was deposited into a Fair Fund at the U.S. Department of the Treasury under Section 308(a) of the Sarbanes-Oxley Act of 2002. Interest continued to accrue on the deposited funds. On May 1, 2026, the SEC approved the transfer of $21,941,064.97 from the Fair Fund to an escrow account at UMB Bank N.A. for distribution to eligible investors — the settlement total plus approximately $1.37M in accrued interest. The distribution plan had been approved by the SEC in November 2024 after a public comment period drew no responses.
Conclusion
The Prime Group Holdings case sits in a category of SEC enforcement actions where the misconduct is not dramatic but the harm is specific: a private equity firm running a large investment fund routed millions in fees to its CEO’s side business and then answered investor questions about that arrangement with denials. The investors in Prime Storage Fund II who received those denials made allocation decisions without the information they needed. The $21.9M now being distributed to them reflects both the fees extracted through the undisclosed arrangement and the civil penalty the SEC imposed for the misrepresentations that kept it hidden for four years.
Editor’s Note — Legal Demands From Prime Group Holdings
On May 7, 2026, this publication received a demand letter from the law firm Cole Schotz P.C. signed by Joseph Barbiere of the firm’s New Jersey office, on behalf of Bob Moser* and Prime Group Holdings, LLC. The letter concerns our May 2, 2026 article titled *Robert Moser of Prime Group Holdings Hit with $21.9M for Hiding $18M in CEO Brokerage Fees*. It demands that the article be removed in its entirety, that we provide written confirmation that we will not publish further coverage of Mr. Moser or Prime Group, and threatens immediate legal action for defamation per se, trade libel, and tortious interference.
A follow-up letter dated May 9, 2026 set a same-day deadline of 3:00 p.m. Eastern Time, on a Saturday, and signaled that, in the event of litigation, counsel would seek discovery into this publication’s *”editorial process, sourcing, communications, publication motive, and any continued dissemination.”*
The article will not be removed.
What The Article Reports, And On What Basis
The article is a report on, and fair comment upon, a public Securities and Exchange Commission enforcement proceeding. Its factual core is drawn from records that any reader can locate on the Commission’s website: the Order Instituting Administrative and Cease-and-Desist Proceedings against Prime Group Holdings, LLC, issued September 5, 2023; the SEC’s contemporaneous press release, No. 2023-167; the Plan of Distribution approved by the Commission; and the May 1, 2026 transfer of $21,941,064.97, representing the $20,571,822 settlement plus accrued interest, to a Fair Fund escrow account at UMB Bank N.A. for distribution to harmed investors of Prime Storage Fund II, LP.
The Commission’s findings, which Prime Group Holdings settled without admitting or denying, were that the firm violated Section 17(a)(2) of the Securities Act of 1933 by making misleading statements in the fund’s offering materials, including its limited partnership agreement, private placement memorandum, and due diligence questionnaires, concerning fees and conflicts of interest. The Commission found that, between 2017 and 2021, nearly $18 million in brokerage fees flowed from the fund to a real estate brokerage firm wholly owned by Prime Group’s CEO. The Commission found that the fund’s offering materials disclosed a 1 percent acquisition fee and a 5 percent property management fee paid to affiliates, but did not disclose the additional 3 percent brokerage fee paid on each property acquisition. The Commission found that, when prospective investors directly asked about brokerage arrangements and affiliate relationships through customized due diligence questionnaires, the responses they received were inaccurate.
The article reports those findings. It does so in the same terms used by the SEC itself and by independent trade press covering the same enforcement proceeding.
Counsel Has Identified No Specific Factual Error
Across two letters, counsel for Prime Group has not identified a single sentence in the article that he contends is factually inaccurate, nor has he submitted any documentary evidence in support of any such contention. The letters object to characterizations and word choices found in our headline and framing. Those characterizations are grounded in the Commission’s own operative findings, are consistent with how independent trade publications have summarized the same matter, and reflect the editorial judgment to which a publication is entitled when reporting on settled regulatory findings against a public business and a public business executive.
We have invited counsel, in writing, to identify with particularity any statement of fact in the article that he believes to be materially false, and to provide the documentary evidence supporting that position. That invitation stands. Any specific factual error brought to our attention with documentary support will be evaluated promptly and corrected if warranted.
On The Legal Theories And The Use Of Same-Day Deadlines
The legal theories asserted in counsel’s letters face well-settled defenses where reporting is grounded in a public administrative proceeding. Faithful reports of official government findings are protected by the fair report privilege in every United States jurisdiction relevant to this matter. Commentary characterizing such findings is protected by the fair comment privilege and the First Amendment. A public figure asserting defamation must establish actual malice, meaning knowledge of falsity or reckless disregard for the truth, a standard that a faithful summary of an SEC order, supported by contemporaneous trade-press reporting, does not meet. Counsel’s own description of his client as a *”well-known business executive”* is itself an acknowledgment that the public-figure standard applies.
The pattern of demand letters with same-day deadlines, sweeping prospective demands for permanent silence, and threats of intrusive discovery into a publisher’s editorial communications is a recognizable one. Several states, including New Jersey, where Cole Schotz is principally based, have enacted anti-SLAPP statutes designed to dispose of such actions early in litigation and to award attorneys’ fees and costs to prevailing publishers. We will rely on those protections, and on every other applicable defense, if litigation is commenced.
Preservation And Continued Coverage
This publication has preserved, and will continue to preserve, all materials related to the article and to this correspondence in accordance with our standard editorial practice and as confirmed in writing to counsel. We will continue to report on matters of public concern involving public figures, public companies, and public regulatory proceedings. We will not enter into agreements that condition future editorial decisions on the demands of any subject of past coverage.
Readers, investors, former employees, or other parties with substantive corrections, additional documentary evidence, or contrary public records bearing on the matters reported in this article are invited to write to the editor at [email protected]