Meyer Wilson

Recovering Losses Caused By Investment Misconduct

Texas REIT Gets Surprise Visit from FBI

Meyer WilsonUnited Development Funding IV was recently raided by the FBI after allegations surfaced that the REIT was functioning like a Ponzi scheme.

The FBI recently conducted a raid of United Development Funding IV (UDF) in Dallas. UDF is a publicly traded real estate investment trust or “REIT” that manages both traded and nontraded REITs. In recent months, UDF’s stock price dipped a substantial 81% - this after a hedge fund claimed the company was operating like a Ponzi scheme.

UDF so far has not commented on the raid. After the REIT’s stock price dropped 81% based on the Ponzi scheme allegations, it took another hit after the raid – a near 55% drop in the company’s share price.

The company’s tailspin began last December when Harvest Exchange, a popular online network for investors, published an article that essentially alleged UDF was operating like a Ponzi scheme. Not long after, UDF responded, vehemently denying the allegations and claiming it was actually the victim of a smear campaign aimed at driving down the price of UDF’s stock.

The most recent development in the UDF saga was when a hedge fund manager, earlier this month, revealed he was shorting UDF, saying, “UDF is using new investor money to pay existing investors” which, if true, would constitute a Ponzi scheme.

You can learn more about REITs from some of Meyer Wilson’s helpful resources:

Choose a Firm with Accolades:

  • Super Lawyers
  • Million Dollar Advocates Forum
  • Preeminent AV Peer Review Rated
  • Best Lawyers Lawyer of the Year
  • Best Lawyers Best Law Firm
  • The Best Lawyers in America
  • Avvo 10/10 Rating