Litigation Releases (Phoenix American Hospitality, LLC; William Lee “Perch” Nelson)

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26560 / June 5, 2026

Securities and Exchange Commission v. Phoenix American Hospitality, LLC and William Lee "Perch" Nelson, No. 3:26-cv-01846-B (N.D. Tex. filed June 4, 2026)

SEC Files Settled Action as to Real Estate Investment Manager and its President for Allegedly Making Untrue Statements to Retail Investors

On June 4, 2026, the Securities and Exchange Commission filed a settled action as to Phoenix American Hospitality, LLC, a Texas-based manager of real estate investment vehicles, and William Lee "Perch" Nelson of Dallas, Texas, PAH's president, for allegedly making untrue statements to retail investors about the assets held by, and profitability of, two hotel-focused investment funds.

The SEC's complaint, filed in the United States District Court for the Northern District of Texas, alleged that PAH and Nelson raised approximately $86 million from more than 2,000 retail investors in the two funds from March 2022 through July 2024. According to the complaint, PAH, through Nelson, claimed that one fund owned as many as 11 hotels, while, in reality, the fund owned only a preferred equity interest in a single hotel until January 2024, when it acquired interests in other hotels. As further alleged, PAH, through Nelson, made untrue statements that both funds made regular profit distributions of up to 12% per year to investors, when, in reality, neither of the funds was profitable and distributions were primarily funded by returns of investor capital.

Without admitting the allegations in the SEC's complaint, PAH and Nelson each consented to the entry of a final judgment, subject to court approval, in which each agreed to be permanently enjoined from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The final judgments, if approved by the court, also would order PAH to pay a $591,127 civil penalty and Nelson to pay a $118,225 civil penalty, as well as impose a five-year officer and director bar on Nelson.

The SEC's investigation was conducted by John Chisholm and Jeremy Graves under the supervision of Marc Ricchiute and Nicholas Heinke, with assistance from trial counsel Rachel Yeates under the supervision of Gregory Kasper, all of the SEC's Denver Regional Office.