United Development Funds REITs: Questions Remain
Are you concerned about your investment losses in United Development Fund REITs? If so, The White Law Group may be able to help.
Investors are getting mixed messages from United Development Funds. The four Texas REITs have combined assets of $1.3 billion but have not issued financial reports since November 2015. Three are nontraded REITs while the fourth, UDF IV, was delisted by Nasdaq this fall and is currently trading on the OTC markets, according to an article in Investment News on Tuesday.
As we told you last month UDF IV, a mortgage and development REIT, issued a cash distribution of 8 cents per share to its shareholders. This should point in a positive direction considering they halted dividends months ago. UDF IV has also recently claimed it has paid down its debt.
Now UDF III has issued a letter to shareholders outlining events of the past year, including “the attack” last December by Harman Capital, and ending on a note of reassurance, according to Investment News. Confusing the message is the fact that no other UDF REIT has issued such positive statements to investors.
If you recall, in February the FBI raided the REIT’s offices in suburban Dallas, after charges that UDF was running a Ponzi scheme. Consequently, Nasdaq halted trading of UDF IV shares at $3.20, down 81% over the prior 12 months.
More troubling news for investors, the Securities and Exchange Commission issued a Wells notice against UDF IV, an indication that SEC staff has made a preliminary determination to possibly recommend an enforcement action against the company.
UDF IV, with $684 million in assets according to SEC filings, closed yesterday at $3.77 a share. UDF-branded REITs and private deals were high yield offerings, promising investors returns of 8% to 10%.
The White Law Group continues to investigate the liability brokerage firms may have for selling UDF IV.
If a broker overlooks suitability requirements, investors may have an actionable claim to recover their losses in a product in a claim through FINRA dispute resolution. The White Law Group has handled dozens of FINRA arbitration claims against brokerage claims involving those firms improper sale of UDF investments, including UDF III and UDF IV.
Brokers have a fiduciary duty to perform due diligence on any investment and to insure that investment recommendations are consistent with their client’s age, net worth, risk tolerance, investment experience and objectives, risk tolerance.
For more detailed information on The White Law Group’s Investigation of UDF IV, see United Development Fund IV (UDF IV) Delisted by NASDAQ
For a free consultation with a securities attorney, please call The White Law Group at 1–888–637–5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, please visit our website at www.WhiteSecuritiesLaw.com.