The Securities and Exchange Commission announced charges against two real estate investment funds and four executives in connection with their alleged roles in misleading investors by failing to disclose that it was using money from a newer fund to pay distributions to investors in the older fund.
FINRA FINDS THAT UDF FOUNDER, WHILE BARRED FROM SECURITIES INDUSTRY, USED WIFE TO SELL $42 MILLION IN UDF SECURITIES AND OBTAIN $2.87 MILLION IN INVESTOR MONEY AS COMMISSIONS
“As a result of the Trust’s failure to file required public filings, on July 8, 2020, NALP, as advisor to NexPoint Strategic Opportunities Fund and other advised funds and accounts, sent a letter to the Trust’s Board of Trustees (the ‘Board’) expressing concerns about the management and oversight of the Trust, and seeking to ensure the Board is held accountable to shareholders and acts in a manner consistent with its obligations to shareholders.”
“In addition to the press releases, Mike Wilson, an employee of the Trust, made phone calls to individual clients and potential client advisers of NALP making the same false statements about NALP described above. Mr. Wilson initiated these communications with the specific intent to harm NALP’s current and prospective business relationships.”
“The Response Letter is even more troubling in light of the United States Securities and Exchange Commission’s (the ‘SEC’) recent deregistration order, as it not only highlights the lack of accountability at the Trust, but also adds to the ‘substantial reason to doubt that [the Trust] will return to compliance.’"
". . . NexPoint is in fact a long-term significant shareholder of the Trust. Based on the limited public information available, we believe NexPoint is in actuality the largest beneficial holder of the Trust shares. . . As one of the largest shareholders, NexPoint’s interests are clearly aligned with the Trust’s shareholder base. . .”
"Mr. Moayedi said to me that the PID and EB-5 loan money was 'our money'; that it belonged to us to do with what we wanted because it was 'ours.' He said we could use the money in anyway we chose, and that no one would have to know or would ever know."
"Mr. Moayedi also engaged in self-dealing by entering into sole-sourced construction contracts on the project with companies owned and/or controlled by Mr. Moayedi."