The Frankowski Firm, LLC currently represents multiple investors who have invested in troubled United Development Funding REITs. Earlier this week, the Securities and Exchange Commission issued a Wells notice against the Texas company, which indicates that the SEC has made a preliminary determination to potentially recommend an enforcement action against it. Meanwhile, the NASDAQ stock market has delisted UDF IV shares.
The UDF REITs have been in trouble for nearly a year. A hedge fund with a short position in UDF IV shares last December claimed the company had been operating as a Ponzi scheme for years. The FBI raided the REIT’s headquarters in a suburb of Dallas in February. At that time, the NASDAQ stopped the trading of UDF IV shares at $3.20, which was down 81% over the previous year.
During the last few months, UDF IV has publicly claimed that it was working to file its 2015 annual reports and its last three quarterly reports with the SEC in order to begin trading again. However, this never happened.
UDF IV claims it plans to appeal the NASDAQ suspension. Meanwhile, particular individuals associated with the REIT have also received Wells notices, which are preliminary determinations by the SEC that it may recommend a civil enforcement action or administrative proceeding against a company or person.
In September 2016, United Development Funding issued a press release claiming that the NASDAQ was continuing to list its shares on the condition that by October 17 it became current in its quarterly financial reports with the SEC. That deadline, however, has come and passed.
Several UDF REITs have stopped paying investors distributions over the last year.If you or someone you know has lost money investing in any of the UDF family of REITs, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.