If you are an investor that purchased real estate from North Dakota Developments, LLC (NDD Group) in North Dakota, USA, you may be able to recover some of your investment losses through securities litigation.
North Dakota Developments, LLC (also referred to as NDD Group) holds itself out as property development firm which develops, among other properties, workforce accommodation properties for oil and gas industry workers. According to its website, North Dakota Developments “focus is on producing superior housing solutions at an affordable price, thereby offering excellent returns for our investors.
Upon information and belief, North Dakota Developments has solicited investors across the world including, but not limited to Europe and Australia, to invest in real estate projects regarding commercial and residential accommodations for oil workers based within the Bakken Formation Region – which is a promising oil shale formation located in part within the State of North Dakota, in the United States.
These transactions were typically structured as the sale of a unit in one of the developments, a lease agreement for the land, and a management agreement whereby North Dakota Developments would manage the property. Under the securities laws of the United States and the State of North Dakota, this type of arrangement would be referred to as an “investment contract”, which is a (i) fractionalized or pooled interest, program, contract, or other arrangement in which (ii) persons invest in a common enterprise the returns of which depend to any extent upon inducing other persons to participate or invest in the enterprise (iii) with the expectation of profit or some other form of benefit to the investor when the investor has no direct control over the investment or policy decisions of the venture. Under the United States Supreme Court case SEC v. W.J. Howey Co., 328 U.S. 293, 301 (1946), investment contracts are securities.
In the United States, under state and federal law, all securities must be registered with the SEC and applicable state securities regulators, or exempt from registration. Upon information and belief, North Dakota Developments, LLC has not registered these securities with the SEC or North Dakota Securities regulators. Moreover, these securities do not appear to have been offered in a manner making them exempt from registration. As a result, both the SEC and North Dakota Department of securities have opened investigations into North Dakota Developments and their sales of the investment contracts to investors.
As a result, upon information and belief, North Dakota Developments has engaged in a widespread offering of unregistered securities to unsuspecting investors. Many of these investors appear to have been introduced through various websites such as usapropertyinvestor.com or usapropertyinvestor.co.uk. Investor appear to be attracted to these investments through various representations of a three year return on investment of 59.4%, with assured rental income and a guaranteed developer buyback for 110%.
Once an investor shows interest in an investment, they have been typically directed to a contact person at Property Horizons, or at US Property Investor (usapropertyinvestor.co.uk). Upon information and belief, Property Horizons was ultimately shut down by the Financial Conduct Authority (FCA) – which is a securities regulator in the UK.
Once an investor expresses interest in moving forward, they typically sign a set of closing documents, and put their funds into escrow with a law firm located in North Dakota. Typically a closing fee is deducted for the services of the non-US firms who introduced the investor to the opportunity. From there, North Dakota Developments requests releases of escrow payments for the investors at various stages of development.
Upon information and belief, while North Dakota Developments continued to request the release of escrow payments from investor despite various setbacks in the development schedule. This has caused investors to grow concerned about their investments with North Dakota Developments and question whether they are viable.
Fortunately for those investors, they may be able to rescind their transactions or otherwise recover some of their investment losses through securities litigation. The state and federal securities laws provide powerful remedies for investors who purchase unregistered securities, such as those believed to have been offered by North Dakota Developments.
If you have invested in North Dakota Developments and would like to explore your legal options, please 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 arbitration practice, please visit www.investmentfraudattorneys.com.
