UDF IV investors may receive additional information about the case by clicking the link "Join this Class Action" above.
According to the complaint, UDF IV is a real estate investment trust (“REIT”) under the larger United Development Funding (“UDF”) umbrella. The company primarily originates, purchases, participates in, and holds for investment secured loans made directly by the company or indirectly through its affiliates to persons and entities for the acquisition and development of parcels of real property as single-family residential lots or mixed-use master planned residential communities, for the construction of single-family homes and for completed model homes.
The complaint alleges that throughout the Class Period, the defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, the complaint alleges that the defendants made false and/or misleading statements and/or failed to disclose: (1) that subsequent UDF companies provide significant liquidity to earlier vintage UDF companies, allowing them to pay earlier investors; (2) that if the funding mechanism funneling retail capital to the latest UDF company were halted, the earlier UDF companies would not be capable of standing alone, and the entire structure would likely crumble with investors left holding the bag; (3) that UDF IV provided liquidity to UDF I, UMT and UDF III, among other affiliates, further exacerbating the problem and perpetuating the scheme; (4) that, as such, the defendants were operating a Ponzi-like real estate investing scheme; (5) that the company was being investigated by the SEC; and (6) that, as a result of the foregoing, the defendants’ statements about UDF IV’s business, operations, and prospects, were false and misleading and/or lacked a reasonable basis.
The Class Period commences on June 4, 2014 when UDF IV issued a press release entitled, “United Development Funding IV Shares to List on NASDAQ.” On December 10, 2015, an anonymous author under the pseudonym “Investor for Truth” published a report on UDF IV on the Harvest Exchange, an investment website, alleging that the UDF IV was engaging in “Ponzi-like real estate scheme.” Following this news, shares of UDF IV fell $6.05 per share, or more than 35%, to close at $11.15 on December 10, 2015, on unusually heavy trading volume.
Then, after the close of trading on December 10, 2015, the company issued a press release disclosing that it has been cooperating since April 2014 with a nonpublic fact-finding investigation being conducted by the Staff of the SEC.
Following this news, shares of UDF IV fell $2.60 per share, or more than 23%, to close at $8.55 on December 11, 2015, on unusually heavy trading volume.
If you are a member of the class described above, you may no later than February 19, 2016, move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP.
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq.
Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-888-299-7706 (toll free) or 1-610-667-7706