Prime Group Holdings’ Robert Moser Hit With $21.9M For Hiding Brokerage Fees

Prime Group Holdings LLC, a Saratoga Springs, New York–based private equity firm focused on alternative real estate, is returning $21,941,064.97 to investors after the Securities and Exchange Commission determined the firm made materially misleading statements in connection with Prime Storage Fund II, LP. The self-storage fund raised more than $500 million starting in 2017. At the center of the SEC’s case was an undisclosed conflict of interest: a 3% brokerage fee on property acquisitions that was paid not to an independent broker, but to a firm wholly owned by Prime Group’s CEO, Robert J. Moser.

From 2017 through 2021, that affiliated brokerage earned nearly $18 million from the fund’s transactions. During that same period, investors who directly asked about brokerage arrangements and affiliate relationships through due diligence questionnaires were told that no such relationships or fees existed. Meanwhile, the fund’s offering documents stated that property sourcing was handled internally. The SEC brought charges against Prime Group in September 2023, and the firm agreed to settle for $20,571,822 without admitting or denying wrongdoing. With interest, the total amount approved for distribution on May 1, 2026, reached $21,941,064.97.

A Fee Structure That Benefited the CEO’s Brokerage

Prime Storage Fund II was launched to acquire off-market self-storage properties across North America. To find deals, Prime Group relied on employees and independent contractors. These sourcing efforts generated a 3% brokerage fee on acquisitions, which was funneled through a brokerage company owned by Moser.

In its September 5, 2023 order, the SEC determined that this brokerage qualified as an affiliate under securities laws. That designation carries clear disclosure obligations: investors must be informed when fees are directed to affiliated entities. Prime Group’s documents did not clearly disclose this arrangement. While the limited partnership agreement mentioned that affiliates could provide services, it did not identify the brokerage fee. The private placement memorandum listed a 1% acquisition fee and a 5% property management fee paid to affiliates, but omitted the additional 3% brokerage charge.

Direct Investor Questions Met With Incorrect Answers

The disclosure issues extended beyond written materials. When potential investors asked explicitly whether brokers were used or whether any fees were paid to affiliates, Prime Group responded that no brokers were involved and that all sourcing was handled internally. Both statements were inaccurate.

The SEC emphasized that these responses turned what might have been a failure to disclose into active misrepresentation. The firm was charged under Section 17(a)(2) of the Securities Act of 1933, which does not require proof of intent to defraud. No individuals were charged. As part of the settlement, Prime Group agreed to cease future violations and pay the full monetary penalty.

Millions in Undisclosed Fees Across Fund Transactions

The affiliated brokerage’s role was substantial. Over four years, it collected nearly $18 million in fees tied to most of the fund’s acquisitions. This 3% fee was charged in addition to the disclosed 1% acquisition fee, meaning investors were unaware of a significant extra cost benefiting an entity controlled by the CEO.

According to the SEC, transparency around affiliate payments and related conflicts is essential for informed investment decisions. In this case, not only was that information missing from official documents, it was contradicted in written responses to investor inquiries. What was presented as an internal sourcing operation was, in reality, generating outside income for the CEO’s separate business.

Settlement and Distribution Details

The settlement included $11,510,625 in disgorgement, $2,561,197 in prejudgment interest, and a $6,500,000 civil penalty, totaling $20,571,822. These funds were placed into a Fair Fund at the U.S. Department of the Treasury under the Sarbanes-Oxley Act. Interest accrued while the funds were held.

On May 1, 2026, the SEC approved the distribution of $21,941,064.97—reflecting the original settlement plus approximately $1.37 million in interest—to eligible investors via an escrow account at UMB Bank N.A. The distribution plan had previously been approved in November 2024 without public objection.

Conclusion

The case highlights a form of misconduct that is less dramatic but still consequential: undisclosed conflicts of interest combined with inaccurate responses to investor inquiries. By routing fees to an affiliated brokerage owned by its CEO and denying that arrangement when asked, Prime Group deprived investors of information necessary to evaluate the fund’s true cost structure. The $21.9 million distribution represents both the improperly collected fees and the penalties imposed for the firm’s misrepresentations.