The Wagner Firm Announces Class Action Lawsuit Against United Development Funding IV

The Wagner Firm announces that a class action complaint has been filed on behalf of a class of United Development Funding IV (“UDF IV” or the “Company”) (Nasdaq: UDF) investors who purchased shares between June 4, 2015 and December 10, 2015, inclusive (the “Class Period”). UDF IV investors are encouraged to contact Avi Wagner, Esquire, of The Wagner Firm, at 310-201-9150 to discuss their legal rights.

On December 10, 2015, a report was published on the Harvest Exchange alleging that the Company was operating a “Ponzi-like real estate scheme,” whereby successive UDF entities would raise capital to bail out prior vintages. On this news, the Company’s shares fell $6.05, or more than 35%, to close at $11.15 on December 10, 2015.

On the same day, after the market closed, the Company issued a press release disclosing that UDF III and UDF IV “have been cooperating since April 2014 with a nonpublic fact-finding investigation being conducted by the Staff of the Securities and Exchange Commission.” On this news, the Company’ shares plummeted another $2.60, or 23.3%, to close at $8.55 per share on December 11, 2015, thereby injuring investors.

The complaint charges UDF IV and certain of its officers with violations of the federal securities laws. Specifically, the complaint alleges that throughout the Class Period, defendants failed to disclose: (1) that subsequent UDF companies provide significant liquidity to earlier vintage UDF companies, allowing them to pay earlier investors; (2) that if the funding mechanism funneling retail capital to the latest UDF company were halted, the earlier UDF companies would not be capable of standing alone, and the entire structure would likely crumble with investors left holding the bag; (3) that UDF IV provided liquidity to UDF I, UMT and UDF III, among other affiliates, further exacerbating the problem and perpetuating the scheme; (4) that, as such, Defendants were operating a Ponzi-like real estate investing scheme; (5) that the Company was being investigated by the SEC; and (6) that, as a result of the foregoing, Defendants’ statements about UDF IV’s business, operations, and prospects, were false and misleading and/or lacked a reasonable basis.

If you purchased shares of UDF IV during the Class Period you may move the Court no later than February 19, 2016 to request appointment as lead plaintiff, or if you have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Avi Wagner, Esquire, of The Wagner Firm, 1925 Century Park East, Suite 2100, Los Angeles, California 90067, at (310) 491-7949, by e-mail at info@thewagnerfirm.com, or visit our website at http://thewagnerfirm.com.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

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