United Development Funding Investigation
Securities fraud class action lawsuits were recently filed on behalf of investors in United Development Funding IV ("UDF IV") who purchased UDF IV securities between June 4, 2014 and approximately December 10, 2015, inclusive. Many investors invested in other United Development Funding programs or did not invest during the proposed time frame and may not be included in those class actions.
On February 18, 2016, the FBI raided United Development Funding's office in Grapevine, Texas.
On February 18, 2016 The Nasdaq Stock Market® (Nasdaq:NDAQ) announced that the trading halt status in United Development Funding IV (Nasdaq:UDF) was changed to “additional information requested” from the company. Trading in the company’s stock had been halted on February 18, 2016, at 13:33:52 Eastern Time for "news pending" at a last price of $3.20.
Trading will remain halted until United Development Funding IV has fully satisfied Nasdaq’s request for additional information. Shares of UDF IV fell nearly 55% before trading was halted on the stock. This follows after the Securities and Exchange Commission began its investigation into United Development Fund in 2014 and after famed hedge fund manager Kyle Bass, who predicted the 2008 subprime mortgage crisis, alleged on his website that UDF is using new investor money to pay existing investors, therefore perpetuating a Ponzi-like scheme.
On February 22, 2016 United Development Funding IV filed an 8-K stating: “law enforcement authorities executed a search warrant at the corporate office of United Development Funding IV (the "Trust") in Grapevine, Texas. The search warrant was issued by a Magistrate Judge of the United States District Court for the Northern District of Texas. In addition, law enforcement officers served executive officers of the Trust and certain other employees of the Trust's advisor and its affiliates with grand jury subpoenas seeking the production of documents related to the operations of the Trust. The Trust does not believe that it, its officers or the employees of its advisor and its affiliates have violated any laws or regulations, and the Trust intends to cooperate fully with the government's investigation. The Trust cannot, however, predict what additional action, if any, government authorities might take in the future.”
If you are an investor that lost more than $100,000, you should consider all legal options. If you are a brokerage firm customer who has sustained losses in United Development Funding securities and wish to discuss your situation and the potential for the recovery of your investment losses, or you have information concerning this investigation, please contact us for an evaluation of your potential case.
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