UDF Investigation – Blog postings by a renowned hedge fund manager who predicted the 2008 subprime debacle alleged that UDF is using new investor money to pay existing investors in Ponzi-like fashion, while UDF management is misleading investors. The allegations pertain to the UDF I, UDF III, UDF IV, and UDF V programs. Recent class actions on behalf of some investors in UDF IV make similar allegations as to that program.
The Peiffer Wolf Carr Kane & Conway (“Peiffer Wolf”) securities attorneys Jason Kane and Joe Peiffer are investigating the activities of United Development Funding (“UDF”) on behalf of investors in United Development Funding I (UDF I), United Development Funding III (UDF III), United Development Funding IV (UDF IV), and United Development Funding V (UDF V). Peiffer Wolf is evaluating legal options on behalf of investors in these investments, including investors who purchased before June 2014.
The Securities and Exchange Commission began its UDF investigation in April 2014. UDF IV’s share price recently plummeted following allegations of Ponzi-like payments to existing investors with new investor money. In November 2015, a UDF board member resigned and the auditor of UDF IV and the other public UDF affiliates auditor declined to stand for reappointment after having been approved by shareholders, without indicating that such declination is the result of any misconduct.
Class action lawsuits on behalf of some – but not all – of the UDF IV investors have recently been filed. UDF IV denied any misconduct.
Famed hedge fund manager Kyle Bass, who predicted the 2008 subprime mortgage crisis, alleged on his website, www.udfexposed.com, that UDF is using new investor money to pay existing investors, therefore perpetuating a Ponzi-like scheme. Mr. Bass also claims UDF took advantage of investors by “using the complexity of real-estate backed loans and a UDF-controlled web of related entities to obscure the fact that UDF is using new investors’ money to make payments to existing investors, and thereby perpetuating the scheme.” For more information about Mr. Bass’ position, as well as his trading in UDF IV, visit his website, www.udfexposed.com (Mr. Bass, his website, and his fund are not related in any way to this law firm or website).
Mr. Bass also singled out some of the investment advisors and brokerage firms that helped raise money for UDF programs from investors by “sacrificing best interest of clients for high fees and commissions.”
In a recent letter to investors, UDF IV disputed any allegations of misconduct. The UDF IV share price plummeted following the allegations.
The Peiffer Wolf securities attorneys are investigating a number of different areas of concern on behalf of UDF investors, including those who invested in UDF programs prior to June 2014. Peiffer Wolf is investigating whether or not UDF and its public affiliates, UDF I, UDF III, UDF IV, and UDF V, have engaged in any Ponzi-like activities or other misconduct involving loans and payments to affiliates and related entities.
The Peiffer Wolf securities lawyers are also investigating a number of brokerage firms’ sales practices involving recommendations for investors to invest in United Development Funding I, United Development Funding III, United Development Funding IV, United Development Funding V, and/or other investment programs sponsored by UDF.
Importantly, the allegations reported on this blog are just that and no finding of misconduct has been entered at this time by any court of law against UDF, its affiliates, control persons, or management. Everyone is presumed innocent until and unless found guilty or liable by a court of law.
Peiffer Wolf’s securities attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. Peiffer Wolf’s UDF Investigation includes the possibility of assisting UDF investors with the recovery of their losses, including those who invested in UDF programs prior to June 2014. Peiffer Wolf handles most cases of this type on a contingency fee basis and advance the case costs, and only get paid for fees and costs out of money recovered for clients.
Investors who believe they lost money as a result of investment fraud or broker misconduct may contact Jason Kane or Joe Peiffer at Peiffer Wolf for a free, no-obligation evaluation of their recovery options, at 504-523-2434, via email at [email protected] and jka[email protected], or through the contact form on this website.
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If you believe you were a victim of investment fraud or broker misconduct, it is imperative to take action. Peiffer Wolf Carr Kane & Conway has represented thousands of victims, and we remain committed to fighting on behalf of investors.