EXCLUSIVE: Citron Says United Development Funding Appears To Be 'Ponzi Scheme' After Anonymous Report Circulates Street

United Development Funding IV UDF shares crashed more than 40 percent on Thursday afternoon after Ponzi scheme allegations circulated Wall Street.

In an interview with Benzinga, Citron Research's Andrew Left said the company appears to be a Ponzi. This follows a tweet Left made, saying the stock "can go to 0."

Anonymous Harvest Report Appears To Be Driver

Left's comments came on the back of an anonymous report posted on hedge fund network Harvest, calling United Development a "Texas-sized scheme."

The unnamed author added, "the UDF umbrella exhibits characteristics emblematic of a Ponzi scheme." These characteristics include new capital and multiple iterations of UDF that could allow the company to pay earlier investors, it added.

"The cracks in UDF's facade are starting to appear," the report said. On or near October 30 of this year, the anonymous author says a lawsuit in Texas named UDF IV as a co-defendant in a case involving allegations of fraud; one month later, UMT, UDF III, UDF IV and UDF V each filed Form 8-Ks revealing their independent accounting firm Whitley Penn LLP was not reappointed as auditor on November 19.

Benzinga has been unable to confirm the existence of these filings. UDF was not immediately available for comment.

Officials at Harvest said they are looking into the identity of the anonymous author.

Jake Mann contributed to this report.