Securities Fraud Investigation – UDF III Losses – United Development Funding III
Have you suffered losses investing in UDF III?
The White Law Group continues to investigate the liability that brokerage firms may have for recommending UDF III to its clients. The firm has handled a number of claims involving UDF funds over the years.
United Development Funding III LP a/k/a “UDF III” is a limited partnership launched in June 2005. The company deals in mortgage loans secured by real property.
United Development Funding III LP (UDF III), a Delaware limited partnership, has reportedly been delinquent in its obligations to file timely periodic reports since September 30, 2015.
In July of 2018, the Securities and Exchange Commission reportedly reached an agreement with two United Development Funding REITs to pay $8.2 million in fines and payments to investors for failing to disclose that it could not meet its distribution payments.
As we have previously reported, the SEC had been investigating UDF since 2014 and issued a Wells notice against one REIT, UDF IV, in 2016.
“Rather than using those funds for development projects that were underwritten by UDF IV, UDF directed the developers to use the loaned money to pay down their older loans from UDF III,” according to the SEC. “In most of these cases, the developer never received the borrowed funds at all, and UDF simply transferred the money between funds so that UDF III could make the distributions to its investors.”
Secondary Sales Price- Updated April 4, 2019
Limited partnerships often lack liquidity because they are not sold on any public exchange, such as the NYSE or NASDAQ. These types of investments are intended for sophisticated and institutional investors. The level of risk is generally too high for conservative and moderate risk investors.
According to a secondary market for private placements, CTT Auctions, shares of United Development Funding III (UDF III) were recently sold for just $1.86 per share. This appears to be a significant loss for investors, as the shares were originally offered at $20.00/share.
If you suffered investment losses investing in UDF III the securities attorneys of The White Law Group may be able to help you recover your losses through FINRA Arbitration.
FINRA can help resolve problems and disputes through two non-judicial proceedings: arbitration and mediation. FINRA’s Dispute Resolution forum handles nearly all of the securities-related arbitrations and mediations in the United States.
To discuss your litigation options, please call the offices of The White Law Group at (888) 637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. The firm represents investors in FINRA arbitration claims throughout the country. Visit the firm’s homepage to learn more about the firm’s representation of investors.