The U.S. Securities and Exchange Commission announced on Tuesday that Prime Group Holdings LLC, a private equity firm with headquarters in Saratoga Springs, New York, has agreed to pay $20.5 million to resolve charges relating to disclosure violations.
Millions of dollars in real estate brokerage fees paid by Prime Group to a company run by its CEO went undisclosed. According to a statement from the SEC, the company consented to pay a civil penalty of $6.5 million and return an additional $14 million in revenues.
According to the SEC, Prime Group failed to sufficiently inform its investors that an affiliated company was collecting real estate brokerage fees for an investment fund the company started in 2017. According to regulators, this affiliate got approximately $18 million in such fees between 2017 and 2021.
Prime Group’s spokesperson declined to comment, and the company neither admitted nor denied the SEC’s allegations.