NEW YORK, Aug. 21, 2009 (GLOBE NEWSWIRE) -- Labaton Sucharow LLP filed a class action lawsuit on August 20, 2009 in the United States District Court for the Southern District of New York on behalf of all persons who purchased or otherwise acquired shares in the UltraShort Financials ProShares fund (the "SKF Fund") (NYSE:SKF), an exchange-traded fund ("ETF") offered by ProShares Trust ("ProShares"), pursuant or traceable to ProShares' false and misleading Registration Statement, Prospectuses, and Statements of Additional Information (collectively, the "Registration Statement") issued in connection with the SKF Fund's shares (the "Class"). The Class is seeking to pursue remedies under Sections 11 and 15 of the Securities Act of 1933 (the "Securities Act").
If you have lost in excess of $200,000 on purchases of the SKF Fund and would like to consider serving as lead plaintiff, or have any questions about the lawsuit, please contact Stefanie J. Sundel, Esq. of Labaton Sucharow at 888-753-2796, or via email at ssundel@labaton.com. Lead Plaintiff motion papers must be filed with the United States District Court for the Southern District of New York no later than October 20, 2009. A Lead Plaintiff is a court-appointed representative for absent class members. You do not need to seek appointment as Lead Plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action.
If you are a member of this class you can view a copy of the complaint and join this class action online at http://www.labaton.com/en/cases/SKFProShares.cfm
The complaint names ProShares; ProShare Advisors LLC, SEI Investments Distribution Co., Michael L. Sapir, Louis M. Mayberg, Russell S. Reynolds, III, Michael Wachs, and Simon D. Collier, as defendants (collectively, "Defendants"). ProShares sells its Ultra and UltraShort ETFs as "simple" directional plays. As marketed by ProShares, Ultra ETFs are designed to go up when markets go up; UltraShort ETFs are designed to go up when markets go down. The SKF Fund is one of ProShares' UltraShort ETFs. The SKF Fund seeks investment results that correspond to twice the inverse (-200%) daily performance of the Dow Jones U.S. Financials Index ("DJFIX"), which measures the performance of the financial services industry of the U.S. equity market. Accordingly, the SKF Fund is supposed to deliver double the inverse return of the DJFIX, which fell approximately 51.03 percent from January 2, 2008 through December 17, 2008, ostensibly creating a sizable profit for investors who anticipated a decline in the U.S. financial services industry. In other words, the SKF Fund should have appreciated by 102.06 percent during this period. However, the SKF Fund only appreciated by approximately 1.06 percent during this period -- hardly a directional play.
The complaint alleges the Defendants violated the Securities Act by failing to disclose that the SKF Fund is altogether defective as a directional investment play, failing to perform anywhere near investors' reasonable expectations. Defendants failed to disclose the following risks in the Registration Statement: (1) inverse correlation between the SKF Fund and the DJFIX over time would only happen in the rarest of circumstances, and inadvertently if at all; (2) the extent to which performance of the SKF Fund would inevitably diverge from the performance of the DJFIX -- i.e., the probability, if not certainty, of spectacular tracking error; (3) the severe consequences of high market volatility on the SKF Fund's investment objective and performance; (4) the severe consequences of inherent path dependency in periods of high market volatility on the SKF Fund's performance; (5) the role the SKF Fund plays in increasing market volatility, particularly in the last hour of trading; (6) the consequences of the SKF Fund's daily hedge adjustment always going in the same direction as the movement of the underlying index, notwithstanding that it is an inverse leveraged ETF; (7) the SKF Fund causes dislocations in the stock market; (8) the SKF Fund offers a seemingly straightforward way to obtain desired exposure, but such exposure is not attainable through the SKF Fund.
Plaintiff is represented by the law firm Labaton Sucharow LLP. Labaton Sucharow is one of the country's premier national law firms that represent institutional and individual investors in class action, complex securities and corporate governance litigation. The firm has been a champion of investor rights for over 40 years and has been recognized for its reputation for excellence by the courts. More information about Labaton Sucharow is available at www.labaton.com.