DALLAS, Nov. 18, 2021 (GLOBE NEWSWIRE) — Strategic Claims Services, the Court-appointed Distribution Agent in the civil action brought by the Securities and Exchange Commission against United Development Funding, III, L.P. and related entities: SEC v. United Development Funding III, LP. Et al., 3:18-CV-01735-L (N.D. Tx) (the “SEC Action”) hereby provides notice to investors who held an interest in United Development Funding IV securities during the period from January 1, 2011 through December 31, 2015, that they may be eligible for compensation from the Fair Fund established in that action.
Please carefully read the notice below for important information regarding this distribution.
TO: INDIVIDUALS AND ENTITIES OR THEIR LAWFUL SUCCESSORS WHO, DURING THE PERIOD FROM JANUARY 1, 2011 THROUGH DECEMBER 31, 2015, INCLUSIVE (“RELEVANT PERIOD”), HELD LIMITED PARTNERSHIP INTEREST(S) IN UNITED DEVELOPMENT FUNDING IV (“UDF IV”) AND/OR THE COMMON STOCK OF UDF IV THAT WAS TRADED ON THE NASDAQ GLOBAL SELECT MARKET UNDER THE SYMBOL UDFI (THE “SECURITIES”)
On July 3, 2018, the Securities and Exchange Commission (“SEC”) filed the SEC Action against United Development Funding III, LP (“UDF III”), UDF IV, Hollis Greenlaw, Benjamin Wissink, Theodore Etter, Cara Obert, and David Hanson (collectively, the “Defendants”). The SEC alleged, among other things, that during the Relevant Period, the UDF family of investment funds used money from UDF IV to pay distributions to investors in UDF III and to pay down UDF III loans without adequately disclosing to investors the use of the funds. The SEC alleged that the Defendants, variously, violated Sections 17(a)(2) and (3) of the Securities Act of 1933 and Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, 13a-13, and 13a-14 thereunder. The action has since been resolved by final judgments entered by consent on July 18, 2018 (“Final Judgments”). The Final Judgments ordered the individual defendants to pay in aggregate $8,275,000 in disgorgement, prejudgment interest, and civil penalties. The Defendants have paid in full.
On July 16, 2019, the United States District Court for the Northern District of Texas, Dallas Division (the “Court”) established the UDF Fair Fund pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002 (the “UDF Fair Fund”) so that the SEC could distribute the collected civil penalties with the collected disgorgement and prejudgment interest.
On October 4, 2021, the Court approved a plan to distribute the UDF Fair Fund (the “Distribution Plan”). The Distribution Plan is publicly available on the SEC’s webpage for this matter (https://www.sec.gov/divisions/enforce/claims/united-development-funding.htm) as well as on the public website of the Court-appointed Distribution Agent (Strategic Claims Services) at https://udffairfund.com/.
You do not need to submit a form to be considered for eligibility for a distribution from the UDF Fair Fund. Potentially Eligible Investors (as defined in the Distribution Plan) will be identified based on information obtained by the Distribution Agent from the claims filed in the related class action (In re United Development Funding IV Securities Litigation, Master File Case No. 3:15-cv-04030-M (N.D. Tex.) (the “Class Action”)) and the records obtained by the SEC from the Defendants and others. However, as set forth before, you may be contacted by the Distribution Agent to provide additional information.
The Distribution Agent will be contacting certain investors for documentation and to file a tax form necessary to the evaluation of their eligibility for a distribution, including investors who opted out of, or filed untimely claims in the Class Action, and investors for whom the Distribution Agent does not have complete investment information. Specifically, the Distribution Agent will be sending to certain investors an Additional Information Request Form (the “Form”) requiring the submission of the completed form, all documentation requested in that form, and the tax form requested on the bottom of page 2 of the mailed Notice. You should timely and fully respond to the Form to ensure that the Distribution Agent has all information necessary to the consideration of your eligibility for a distribution.
Additional information regarding the UDF Fair Fund, including the Distribution Plan and related documents are available on the Distribution Agent’s website, www.UDFFairFund.com. If you have a question regarding the UDF Fair Fund, the Distribution Plan, or your eligibility for a distribution under the Distribution Plan that is not answered on the website, please contact the Distribution Agent at:
UDF Fair Fund
c/o Strategic Claims Services
600 N. Jackson St., Ste. 205
P.O. Box 230
Media, PA 19063
Toll-free: (855) 379-9007
Fax: (610) 565-7985
Email: info@UDFFairFund.com
Please check the website www.UDFFairFund.com frequently for updates.
