David Hanson has voluntarily resigned from his positions at United Development Funding IV (OTCMKTS: UDFI) and United Development Funding Income Fund V, two real estate investment trusts sponsored by UDF.
Hanson served as chief accounting officer of UDF IV, a non-traded REIT, and chief accounting officer and chief operating officer of UDF V, a public REIT that now trades on the over-the-counter market after being delisted from Nasdaq in October 2016. Both REITs noted that his resignation was not the result of any disagreement with the companies or their respective boards.
UDF recently filed a lawsuit in a Dallas County Court against hedge fund manager Kyle Bass and his firm Hayman Capital, which held a short position in one of UDF’s entities. In late 2015, Bass anonymously authored and posted a series of online reports on an investor networking website that detailed unsubstantiated claims against UDF that sent stock prices plummeting.
The lawsuit claims that the UDF funds were “extensively” damaged due to disparaging statements made by defendants Bass and Hayman, including that UDF operated as a Ponzi scheme.
In July, the Securities and Exchange Commission charged two UDF funds and four executives, including Hanson, for allegedly misleading investors by failing to disclose that it could not pay its distributions and was using money from a newer fund to pay distributions to investors in the older fund. The SEC also charged a fifth executive for allegedly signing false SEC filings.
In addition to Hanson, the SEC’s complaint named UDF III, a limited partnership, UDF IV, co-founder and CEO Hollis Greenlaw, president Benjamin Wissink, chairman and co-founder Theodore Etter, chief financial officer Cara Obert.