Faruqi & Faruqi, LLP’s national practice focuses on complex civil litigation. The firm practices in the areas of Securities, Merger & Transactional, Shareholder Derivative, Antitrust, Consumer Class Action, and Wage & Hour litigation.
Friday, February 5, 2016
Faruqi & Faruqi Alert: United Development Funding IV
The lawsuit has been filed in the U.S. District Court for the Northern District of Texas on behalf of all those who purchased United Development securities between June 4, 2015 and December 10, 2015 (the “Class Period”). The case, The Charles G. and Rose M. Fairbanks Living Trust v. United Development Funding IV et al, No. 3:15-cv-04055 (N.D. Tex. Dec 23, 2015) was filed on December 23, 2015, and has been assigned to Judge Sam R. Cummings.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by operating a Ponzi-like real estate scheme and by failing to disclose that the Company was being investigated by the Securities and Exchange Commission.
After this news, United Development’s share price fell $6.05 from $17.20 per ADR on December 9, 2015 to close at $11.15 per share on December 10, 2015, or approximately 35.2%.
After the market closed that day, the Company disclosed that since April 2014 it has been cooperating in a nonpublic fact-finding investigation by the SEC into its operation and management of previous United Development related entities and funds.
On this news, United Development’s share price fell $2.50 from $11.15 per share on December 10, 2015 to close at $8.55 per share on December 11, 2015, or approximately 22.4%.