February 7, 2017 Comments (0) Current Investigations

United Development Funding Income Fund V Distribution

Hines REIT
(Last Updated On: February 14, 2017)

Suffered Investment Losses with United Development Funding Income Fund V?

Are you concerned about investment losses in United Development Funding Income Fund V? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

United Development Funding Income Fund V  is a real estate investment trust (REIT) formed to generate current interest income by investing in secured loans and producing profits from investments in residential real estate, according to their website.

On February 2, 2017, the board of trustees of United Development Funding Income Fund V announced a cash distribution of $1.1689 per share, payable on February 8, 2017, to shareholders.

However, the White Law Group continues to investigate potential securities fraud claims involving broker-dealers’ improper recommendation that some investors purchase non-traded REIT investments such as United Development Funding Income Fund V or United Development Funding IV.

As we told you last year, United Development Funding IV, the company’s only publicly traded REIT, was accused of orchestrating a $1 billion “Ponzi-like” scheme. On February 18, 2016, the FBI raided United Development Funding IV’s office in Grapevine, Texas and seized documents and computers as directed by a federal judge. United Development Funding IV also received a grand jury subpoena.

On the same day, share prices of UDF IV fell to $3.20 before trading was suspended. This follows after the Securities and Exchange Commission began its investigation into United Development Fund IV in 2014 and after famed hedge fund manager Kyle Bass alleged that UDF was using new investor money to pay existing investors, therefore perpetuating a Ponzi-like scheme. UDF denied any wrongdoing.

Unfortunately for some investors limited partnerships and real estate investment trusts (REIT) sponsored by UDF were not as “safe” as their broker led them to believe.

The Trouble with Non-Traded REITs

The trouble with non-traded real estate investment trusts (REITs) like United Development Funding Income Fund V, is that they lack liquidity and are inherently risky. Compared to traditional investments, such as stocks, bonds and mutual funds, non-traded REITs are more complex and are better suited for investors that can afford to risk the total losses of their investment.

Brokers often earn extremely high sales commission selling non-traded REITs, sometimes as high as 15%. Unfortunately, the high sales commissions associated with non-traded REITs often provides some broker dealers with enough incentive to overlook suitability requirements.

In addition, brokers are required to perform adequate due diligence on any investment they recommend. They must ensure that all recommendations are suitable for the investor and are in line with the clients risk tolerance, age, net worth, and investment experience.

If a brokerage firm makes unsuitable investment recommendations or fails to adequately disclose the risks associated with an investment they may be liable for investment losses through FINRA arbitration.

To determine whether you may be able to recover investment losses incurred as a result of your purchase of United Development Funding Income Fund V, please contact The White Law Group at (888) 637-5510 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. For more information on the firm, visit www.WhiteSecuritiesLaw.com.