Recovery of Investment Losses in United Development Funding IV
Have you suffered losses investing in United Development Funding IV (UDF IV)? If so, The White Law Group may be able to help you by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment.
United Development Funding IV is a Maryland real estate investment trust listed on The NASDAQ Global Select Market. UDF IV was formed primarily to generate current interest income by investing in secured loans and producing profits from investments in residential real estate.
On February 18, 2016, the FBI raided United Development Funding IV’s office in Grapevine, Texas and seized documents and computers pursuant to a warrant signed by a federal judge. United Development Funding IV also disclosed that it received a grand jury subpoena.
On the same day, share prices of UDF IV fell to $3.20 before trading was suspended. This follows after the Securities and Exchange Commission began its investigation into United Development Fund IV in 2014 and after famed hedge fund manager Kyle Bass alleged that UDF was using new investor money to pay existing investors, therefore perpetuating a Ponzi-like scheme. UDF denied any wrongdoing.
The company was delisted from trading on NASDAQ in October 2016 and is still under investigation by the Securities and Exchange Commission.
Recent Tender Offer
Two companies, SCM Special Fund 3 and Lemon Creek Advisers, have purchased 37,890 shares of United Development Funding IV for $1.25 each. The companies originally offered to purchase 1.6 million shares of UDF IV, according to various reports.
The companies are affiliates of Mackenzie Capital Management and Sutter Capital Management.
United Development Funding IV currently has 1,775 holders of record owning nearly 30.7 million shares. The purchasers now own approximately 38,733 shares or less than 0.13 percent of UDF IV’s total outstanding shares.
Prior to its suspension, the United Development Funding IV’s stock traded $3.20 per share on February 18th and had a 52-week trading range of $3.20-$18.31 per share. The company traded on the OTC markets for $2.25-$2.58 per share in the 30 days preceding the tender offer, according to reports.
United Development Funding IV has not filed any quarterly financial documents since November 2015.
Investors who purchased UDF investments in reliance upon the recommendation of a broker-dealer firm may also be eligible to pursue claims in arbitration against the firm and seek compensation for any losses they suffered as a result of those investments.
Brokers have a fiduciary duty to perform due diligence on any investment and to ensure that investment recommendations are consistent with their client’s age, net worth, risk tolerance, investment experience and objectives, risk tolerance. 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.
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.
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