Meyer Wilson Law Firm Investigating United Development Funding Claims
Were you sold investments in UDF? Call today.
The investment fraud lawyers at the law firm of Meyer Wilson are investigating
potential claims on behalf of investors in United Development Funding
(UDF) against the brokerage firms who sold the investments to their customers.
If you invested in United Development Funding at the recommendation of
your broker and lost money, we invite you to contact an investment fraud
lawyer at Meyer Wilson today for a free review.
Fill Out a Free Online Review Form
For several years, UDF, a Texas-based non-traded real estate investment
trust (REIT), has marketed itself to retail investors on the premise that
it offers “unique and fundamentally sound investments in affordable
residential real estate.” According to UDF’s website, all
UDF investments are sold through brokerage firms. Under securities industry
rules, brokerage firms are required to conduct extensive due diligence
on any investment that a firm sells to its customers. It has been reported
that UDF has raised approximately $1 billion in funding through brokerage
firm sales to retail investors in recent years.
Wall Street Journal, federal agents raided UDF’s offices in February, issuing subpoenas
to company executives and removing various materials from the premises.
A spokesperson for the FBI said that the agents were conducting “law
enforcement activity” but declined further comment. No charges have
yet been filed.
News of the FBI raid sent shares of UDF’s largest fund, United Development
Funding IV, plummeting 54%.
Potential Problems Revealed
Just two days before the FBI raid,
The Wall Street Journal published an article highlighting potential problems with UDF IV’s
concentrated lending practices. According to the article, although UDF
operates in North Carolina, South Carolina and Florida, 99% of the UDF
IV fund’s portfolio consists of loans made to borrowers in Texas.
The article further states that 67% of the balance of UDF IV loans was
made to a single borrower, Texas-based Centurion American Development,
or Centurion’s affiliates.
In December 2015, a Dallas hedge fund publicly raised questions about UDF
on an Internet site. Among the allegations raised by the hedge fund was
that UDF had used new investor money to repay investors in UDF’s
earlier investment vehicles “consistent with a Ponzi scheme.”
What To Do Next
The lawyers at Meyer Wilson have represented approximately 1,000 investors
over the last 15 years and have recovered tens of millions of dollars
on their behalf. If you invested money in United Development Funding through
the recommendation of a brokerage firm and lost money in those investments,
contact the lawyers at Meyer Wilson to discuss your potential recovery
options. You might be able to recover your losses against the brokerage
firm that sold you the investments. Initial consultations are free and
all of our cases are handled on a contingency fee basis.