Texas-based United Development Funding (“UDF”) recently suspended distribution payments to investors in the UDF III fund. The company had been paying distributions on a monthly basis.
This announcement comes after recent news surrounding UDF including allegations of being a Ponzi scheme made by a hedge fund investor, the resignation of a UDF IV board member, the decision of UDF IV’s auditor not to seek reappointment, and an SEC investigation that UDF disclosed started in 2014. Following an FBI raid and seizure of UDF’s records and computers, NASDAQ suspended UDF IV’s stock from trading. Subsequently, a UDF V board member resigned and UDF announced that UDF V would prematurely de-register its ongoing offering. No wrongdoing has been yet been proven against UDF in a court of law.
In a March 23 letter to investors, the company’s board of directors stated that it “feel[s] it is prudent for UDF III to preserve cash as we continue to work with UDF III’s borrowers to determine their capital requirements. Therefore, we are not forecasting limited partner distributions at this time.” The company stated that it intended to provide updates at some point in the future.
The securities attorneys at Peiffer Wolf Carr & Kane, Jason kane and Joe Peiffer, have already talked to over a hundred investors in UDF programs and have been retained by investors many to seek recovery on their behalf. They have filed the first of several envisioned cases and are preparing more proceedings in the near future. Their investigation has been going on for several months.
The Peiffer Wolf Carr & Kane lawyers often take cases of this type on a contingency-fee basis and only get paid out of proceeds they recover on behalf of investors. Investors who believe they have lost money as a result of their investment in UDF may call Jason kane or Joe Peiffer for a free, no-obligation evaluation of their recovery options at 216-589-9280.