National investment loss lawyers KlaymanToskes is investigating brokerage firms and financial advisors who unsuitably recommended investments in Lodging Fund REIT III to their customers. Our law firm believes many investors may have been misled regarding the risks and liquidity issues associated with this private placement offering.
If your financial advisor recommended an unsuitable Real Estate Investment Trust (“REIT”) investment based on your investment profile, or disregarded your risk-tolerance when making investment recommendations, you may be entitled to a financial recovery through FINRA arbitration.
If you suffered losses in Lodging Fund REIT III, or any other investments due to unsuitable recommendations by your brokerage firm or financial advisor, contact securities attorney Steven D. Toskes to discuss your potential recovery options at (888) 997-9956 or investigations@klaymantoskes.com for a free and confidential consultation. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
Lodging Fund REIT III is a non-traded real estate investment trust focused on hospitality-related real estate assets. Like many private REITs, its shares are not publicly traded, meaning investors cannot sell their holdings on an exchange and must rely on limited and discretionary redemption programs for liquidity.
Because the REIT is offered through private placements, investors receive less transparency than they would with publicly traded REITs and often rely heavily on representations made by brokers and offering documents.
Lodging Fund REIT III has experienced significant delays in required financial filings, raising concerns about transparency and internal controls.
In September 2025, the Securities and Exchange Commission (SEC) announced a Proposed Plan of Distribution related to enforcement actions involving entities affiliated with Lodging Fund REIT III, including Legacy Hospitality II, LLC, Legendary Capital REIT III, LLC, and Corey R. Maple.
The SEC previously found that, between 2014 and 2020, the respondents improperly caused two REITs—one of which was Lodging Fund REIT III—to reimburse approximately $5 million in overhead expenses in a manner inconsistent with disclosures made to investors.
As part of the settlement, the respondents were ordered to pay approximately $4.77 million in disgorgement, interest, and civil penalties. These funds were placed into an SEC Fair Fund under the Sarbanes-Oxley Act of 2002, intended to compensate harmed investors.
The Net Available Fair Fund, after deductions for taxes and administrative costs, is expected to be distributed to eligible investors who were adversely affected by the improper expense reimbursements.
Potential conflicts of interest may arise when issuers incentivize brokers/investment advisors with substantial commissions to promote their financial products. A problem often associated with alternative investment recommendations is the high sales commissions brokers typically earn for selling these investments, which can be as high as 15%. A representative that recommends investments for the purpose of being compensated through increased commissions, and enriches themselves rather than benefiting the client, is violating securities laws.
To recover investment losses, you do not go through the traditional court system with a lawsuit. The only remedy is through a FINRA arbitration, a specific process designed for these types of disputes. This process involves presenting your case to a panel set by the Financial Industry Regulatory Authority (FINRA), not a courtroom. This approach is streamlined and focused on investment disputes, making it a suitable and effective way for investors to seek compensation for losses caused by financial advisors or brokerage firms.
FINRA (the Financial Industry Regulatory Authority) is a self-regulatory organization that oversees brokers and brokerages. In the event of a dispute between an investor and their financial advisor, investors can choose to file a FINRA arbitration claim. FINRA is overseen by the Securities and Exchange Commission (“SEC”).
The arbitration process is designed to be much faster than the court system and allows both parties to present their case before a panel of arbitrators. The arbitrators will then decide how to resolve the dispute, including ordering the advisor to pay damages for any losses suffered by the investor.
If you suffered losses in Lodging Fund REIT III or other investments, you are encouraged to contact attorney Steven D. Toskes, at 888-997-9956 or by email at investigations@klaymantoskes.com to discuss potential recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
As an investor, there are signs that you should look out for if you believe you have a claim against your broker/advisor for unsuitable investment recommendations in Lodging Fund REIT III. These signs could potentially indicate misconduct, negligence, or investment fraud. Investors are encouraged to contact our firm immediately if you have experienced any of the following:
Some investors have close relationships with their brokers due to the time and trust built over the course of their investment relationship. However, it is crucial to remember that financial decisions should be based on careful analysis and due diligence rather than solely relying on personal relationships.
Engaging the services of an experienced securities attorney to evaluate your specific circumstances is strongly advised. At KlaymanToskes, our team of experienced securities attorneys has a deep understanding of this complex area of law, allowing us to provide invaluable insight and tailored guidance that directly addresses your individual needs.
If you purchased unsuitable Lodging Fund REIT III investments, or any other unsuitable investments through your financial advisor/brokerage firm, and suffered significant losses, contact KlaymanToskes at 888-997-9956 or fill out a short contact form for a free and confidential consultation. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.