Blog

United Development Funding IV, the Texas REIT was operating like a Ponzi scheme

United Development Funding IV, the Texas REIT hit by anonymous allegations late last week that it was operating like a Ponzi scheme, provided fresh details Monday on an unnamed hedge fund or funds that it claims have been illegally distorting its share price for its own benefit.

In a Securities and Exchange Commission filing, UDF IV said it was the victim of a type of securities trading scheme known as a “short and distort,” in which an investor builds up a significant short position in a stock “with the intention of unlawfully manipulating” its shares. In this instance, the goal of the “short and distort” was to create a negative perception about the company through Internet posts.

Last Thursday, Harvest Exchange, an online professional network for investors, published an anonymous report about UDF titled: “A Texas-Sized Scheme: Exposing the Darkest Corner of the REIT Business, United Development Funding.” The REIT has $1.3 billion of assets on the books of various REITs and real estate private placements, including UDF IV. “The UDF umbrella exhibits characteristics emblematic of a Ponzi scheme,” according to the anonymous post.

Read More

Please Login to comment.
Statements and opinions expressed in articles, reviews and other materials herein are those of the authors; the editors and publishers.
While every care has been taken in the compilation of this information and every attempt made to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur. FundPage, Inc. will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.
The content of any organizations' websites which you link to from www.FundPage.com are entirely out of the control of FundPage, Inc., and you proceed at your own risk. These links are provided purely for your convenience. They do not imply FundPage, Inc.’s endorsement of, or association with any products, services, content, information or materials offered by or accessible to you at the organization’s site.
All copyright and trademarks accessible via the links from www.FundPage.com are owned by the respective website owners, or their licensors.
FundPage shall also have the right to remove any contents posted at any time without cause as FundPage determines in its sole discretion.

My Community

My Friends