If you are have suffered losses investing in United Development Funding Income Fund V (UDF Income Fund V), you may be able to recover your losses though FINRA arbitration. Please call Kons Law Firm at (860) 920-5181 for a FREE, NO OBLIGATION consultation to discuss your investment loss recovery options.
United Development Funding Income Fund V
According to its website, United Development Funding Income Fund V (“UDF V” or "UDF Income Fund V") is a real estate investment trust (REIT) formed to generate current interest income by investing in secured loans and producing profits from investments in residential real estate. United Development Funding Income Fund V is a non-traded REIT sponsored by United Development Funding - a Grapevine, Texas non-traded REIT sponsor. As of December 2015, United Development Funding Income Fund V has raised over $40 million in capital from individual, retail investors.
In February 2016, the FBI raided United Development Funding's offices in Grapevine, Texas to collect evidence for a pending investigation into its activities. As such, it is unclear what impact this investigation of United Development Funding Income Fund V will have on current investors shares in United Development Funding Income Fund V.
Brokerage Firms Have a Duty to Ensure REITs Like United Development Funding Income Fund V Are Suitable for Investors
Securities broker-dealers have a regulatory duty to ensure that any investments they recommend to customers are suitable for them. This is especially important for brokerage firms selling non-traded REITs like United Development Funding Income Fund V. FINRA Rule 2111 (NASD Rule 2310) requires that securities broker-dealers to conduct a suitability analysis when recommending securities to investors that will take into account the investors’ knowledge and experience. The brokerage firm must make reasonable efforts to gather and analyze information about the customer’s other holdings, financial situation and needs, tax status, investment objectives and such other information that would enable the firm to make its suitability determination.
In addition to ensuring that securities are suitable for its customers on an individual level, FINRA Rule 2111 (NASD Rule 2310) also states that a securities must have reasonable grounds to believe that a recommendation to purchase, sell or exchange a security is suitable for the customer. This “reasonable-basis” suitability requirement means that in the context of non-traded REITs like United Development Funding Income Fund V, brokerage firms have a duty to conduct due diligence on these investments.
Brokerage firms and stockbrokers that fail to adhere to their suitability obligations can in many cases be held liable if an investor suffers a loss in an unsuitable investment recommended by such broker or brokerage firm.
United Development Funding Income Fund V Investors May Be Able to Pursue Recovery of their Losses through FINRA Arbitration
Fortunately for investors, they may be able to recover their investment losses in United Development Funding Income Fund V (UDF Income Fund V) through FINRA arbitration against the stockbroker or brokerage firm that recommended this investment to them.
If you are have suffered losses in United Development Funding Income Fund V (UDF V), you may be able to recover your losses though FINRA arbitration. Please call Kons Law Firm at (860) 920-5181 for a FREE, NO OBLIGATION consultation to discuss your investment loss recovery options.
Kons Law Firm represents investors nationwide in securities arbitration and litigation matters. To learn more about the Firm’s securities litigation and FINRA arbitration practice, please visit www.investmentfraudattorneys.com.
