Troubled Texas REIT claims no fraud after internal investigation

May 20, 2016

UDF IV, a target of Kyle Bass, says it is not operating a Ponzi scheme

May 18, 2016 @ 10:43 am | By Bruce Kelly | Investment News

UDF IV, a troubled real estate investment trust that had its shares stop trading in February after its offices were raided by the FBI, said on Tuesday that it had conducted an independent investigation of its business and found no evidence of fraud.

Formerly a nontraded REIT marketed by Nicholas Schorsch’s defunct Realty Capital Securities, UDF IV was listed on the Nasdaq in June 2014. In December, an anonymous post on an investor website claimed that UDF IV, a lender to real estate developers, was operating like a Ponzi scheme.

It was later revealed that hedge fund manager Kyle Bass, founder of Hayman Capital Management, was shorting UDF IV. Company shares plunged for months before they stopped trading at $3.20.

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Second Annual Blue Vault Broker Dealer Educational Summit 2016
Broker Dealer Educational Summit 2016
May 30, 2016

The time (at Blue Vault's 2nd Annual Broker Dealer Educational Summit) proved extremely informative.