Peachtree Hotel Value & Income Fund II: Did Your Broker Tell You About the Risks?

If you lost money after investing in the Peachtree Hotel & Value Income Fund II, you may be able to recover losses through FINRA arbitration. Peachtree Hotel Value & Income Fund II issued an offering of $150,000,000 in securities on February 16, 2018. The fund raised money through an SEC Form D offering. These are exempt offerings, a.k.a. private placements. Private placements are risky, illiquid investments, and brokers should have advised their clients about the risks before investing in Peachtree Hotel Fund.

Why Do Private Placements Come with High Risk?

Private placements do not come with prospectuses. Publicly traded companies provide prospectuses that explain how the company plans to make money. Because private companies provide less information about their goals and finances, there is less information for brokers and investors to evaluate.

Furthermore, investments that appear on a public exchange are liquid, meaning that you can sell them whenever you choose. Private placements are illiquid – if you decide you need your money back, you may be stuck.

What is Peachtree Hotel Group?

According to their site, Peachtree Hotel Group is a “privately held real estate investment company that finances, owns, operates, manages, and develops hotels throughout the United States.” Like every hospitality business, the hotel group suffered major losses following the pandemic.

Why Did Brokers Recommend Peachtree Hotel Value & Income Fund II?

Brokers knew or should have known the risks associated with private placements. Unfortunately for investors, these types of investments can come with high sales commissions. For shares of Peachtree Hotel & Value Income Fund II, brokers may have charged sales commissions as high as 10%. Ordinary investments usually offer commissions of around 1% to 2%.

Kurta Law Can Help Recover Your Losses

Did you lose money investing in Peachtree Hotel Value & Income Fund II? If your broker engaged in any type of misconduct when they recommended shares of Peachtree Hotel Fund, you may be able to recover your losses through FINRA arbitration.

Your broker may have violated FINRA rules by making an unsuitable investment recommendation. Brokers should only recommend investments that fit their investor’s risk tolerance. Additionally, they may have engaged in misconduct by misrepresenting the security as a safe investment. Brokers might manipulate an investor by suggesting they have an opportunity to make big returns without providing information about the risks for losses.

These are just a few possibilities.

Many broker-dealers require investors to agree to settle disputes through FINRA arbitration. Securities attorneys like Jonathan Kurta have worked on behalf of investors for decades. He also has experience defending brokerages, and he can offer unique insight into investors’ arbitration cases. For a free case evaluation, contact Kurta Law. Call 212-658-1502 or email jkurta@kurtalawfirm.com.