The SEC charged unregistered REIT fund manager, Phoenix American Hospitality, LLC ("PAH") and its founder, William Lee “Perch” Nelson, for allegedly making untrue statements to retail investors about the assets held by, and profitability of, two hotel-focused investment funds. According to the SEC's complaint, the defendants engaged a consulting firm that specialized in directly marketing Regulation A and other exempt securities offerings to investors. The consulting firm helped create and successfully launch a marketing campaign that targeted retail investors through multiple means, including social media advertisements, a new website, emails, and live webinars hosted by Nelson that were later posted to the PAH's websites and YouTube. The firm raised two REITs to invest in U.S.-based hotels raising $86 million from more than 2000 retail investors from March 2022 through July 2024. The firm allegedly 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. The defendants agreed to pay combined penalties of more than $700,000, and Nelson agreed to a five-year officer and director bar. Fundraising from retail investors through social media, live webinars and other means often catches the SEC's attention. Fund managers should proceed cautiously before engaging in aggressive marketing campaigns and ensure their claims are not exaggerated and can be fully supported.