Proshares Ultrashort Dow 30 Fund (Symbol: DXD) Class Action Filed by Bernstein Liebhard LLP

Bernstein Liebhard LLP filed a class action lawsuit on October 1, 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 Dow 30 fund (the “DXD Fund”), 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 shares of the DXD Fund (the “Class”). The Class is seeking to pursue remedies under Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”).

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 DXD Fund is one of ProShares’ UltraShort ETFs. The DXD Fund seeks investment results that correspond to twice the inverse (-200%) daily performance of the Dow Jones Industrial Average (“DJIA”).  Accordingly, the DXD Fund is supposed to deliver double the inverse return of the DJIA, which fell approximately 34 percent from January 2, 2008 through December 31, 2008, ostensibly creating a profit for investors who anticipated a decline in the DJIA. In other words, the DXD Fund should have appreciated by over 68 percent during this period. However, the DXD Fund rose only 7 percent during this period.

The complaint alleges the Defendants violated the Securities Act by failing to disclose the following risks, inter alia, in the Registration Statement: (1) if DXD Fund shares were held for a time period longer than one day, the likelihood of catastrophic losses was huge; and (2) the extent to which performance of the DXD Fund would inevitably diverge from the performance of the DJIA—i.e., the overwhelming probability, if not certainty, of spectacular divergence.

Bernstein Liebhard LLP has also filed claims on behalf of shareholders in the SRS, SKF, and DUG funds, and is investigating claims on behalf of investors in all other ProShares leveraged funds (the “Funds”) (see list below).

Fund Ticker
UltraShort QQQ NYSE: QID
UltraShort Dow30 NYSE: DXD
UltraShort S&P500 NYSE: SDS
UltraShort Russell3000 NYSE: TWQ
UltraShort MidCap400 NYSE: MZZ
UltraShort SmallCap600 NYSE: SDD
UltraShort Russell2000 NYSE: TWM
UltraPro Short S&P500 NYSE: SPXU
UltraShort Russell1000 Value NYSE: SJF
UltraShort Russell1000 Growth NYSE: SFK
UltraShort Russell MidCap Value NYSE: SJL
UltraShort Russell MidCap Growth NYSE: SDK
UltraShort Russell2000 Value NYSE: SJH
UltraShort Russell2000 Growth NYSE: SKK
UltraShort Basic Materials NYSE: SMN
UltraShort Consumer Goods NYSE: SZK
UltraShort Consumer Services NYSE: SCC
UltraShort Health Care NYSE: RXD
UltraShort Industrials NYSE: SIJ
UltraShort Real Estate NYSE: SKF
UltraShort Semiconductors NYSE: SSG
UltraShort Technology NYSE: REW
UltraShort Telecommunications NYSE: TLL
UltraShort Utilities NYSE: SDP
UltraShort MSCI EAFE NYSE: EFU
UltraShort MSCI Emerging Markets NYSE: EEV
UltraShort MSCI Europe NYSE: EPV
UltraShort MSCI Pacific ex-Japan NYSE: JPX
UltraShort MSCI Brazil NYSE: BZQ
UltraShort FTSE/Xinhua China 25 NYSE: FXP
UltraShort MSCI Japan NYSE: EWV
UltraShort MSCI Mexico Investable Market NYSE: SMK
UltraShort 7-10 Year Treasury NYSE: PST
UltraShort 20+ Year Treasury NYSE: TBT
UltraShort DJ-UBS Commodity NYSE: CMD
UltraShort DJ-UBS Crude Oil NYSE: SCO
UltraShort Gold NYSE: GLL
UltraShort Silver NYSE: ZSL
UltraShort Euro NYSE: EUO
UltraShort Yen NYSE: YCS
Ultra QQQ NYSE: QLD
Ultra Dow30 NYSE: DDM
Ultra S&P500 NYSE: SSO
Ultra Russell3000 NYSE: UWC
Ultra MidCap400 NYSE: MVV
Ultra SmallCap600 NYSE: SAA
Ultra Russell2000 NYSE: UWM
UltraPro S&P500 NYSE: UPRO
Ultra Russell1000 Value NYSE: UVG
Ultra Russell1000 Growth NYSE: UKF
Ultra Russell MidCap Value NYSE: UVU
Ultra Russell MidCap Growth NYSE: UKW
Ultra Russell2000 Value NYSE: UVT
Ultra Russell2000 Growth NYSE: UKK
Ultra Basic Materials NYSE: UYM
Ultra Consumer Goods NYSE: UGE
Ultra Consumer Services NYSE: UCC
Ultra Financials NYSE: UYG
Ultra Health Care NYSE: RXL
Ultra Industrials NYSE: UXI
Ultra Oil & Gas NYSE: DIG
Ultra Real Estate NYSE: URE
Ultra Semiconductors NYSE: USD
Ultra Technology NYSE: ROM
Ultra Telecommunications NYSE: LTL
Ultra Utilities NYSE: UPW
Ultra DJ-UBS Commodity NYSE: UCD
Ultra DJ-UBS Crude Oil NYSE: UCO
Ultra Gold NYSE: UGL
Ultra Silver NYSE: AGQ
Ultra Euro NYSE: ULE
Ultra Yen NYSE: YCL
Ultra MSCI EAFE NYSE: EFO
Ultra MSCI Emerging Markets NYSE: EET
Ultra FTSE/Xinhua China 25 NYSE: XPP
Ultra MSCI Japan NYSE: EZJ
Ultra FTSE/Xinhua China 25 NYSE: XPP
Ultra MSCI Japan NYSE: EZJ

Plaintiff in the DXD Action seeks to recover damages on behalf of all Class members who purchased or otherwise acquired shares of ProShares DXD. If you purchased or otherwise acquired ProShares DXD shares, and either lost money on the transaction or still hold the shares, you may wish to join in the action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than November 30, 2009.

A “lead plaintiff” is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard LLP, or other counsel of your choice, to serve as your counsel in this action.

If you purchased or otherwise acquired Shares in the DUG, SRS or SKF Funds, or any or any of the funds, and either lost money on the transcation or still hold the shares, please contact Christian Siebott or Joseph R. Seidman, Jr. , at (877) 779-1414.

The current plaintiff deadlines are as follows.

SRS Fund-10/5/09SKF Fund 10/20/09EEV Fund-11/3/09DUG, UYG, SDB, FXP, and SCO Funds-11/23/09DXD Fund-11/30/09

Bernstein Liebhard LLP has pursued hundreds of securities and consumer cases and recovered approximately $2 billion for its clients. It has been named to The National Law Journal’s “Plaintiffs’ Hot List” in each of the last six years.

You can view a copy of the DXD complaint here. The DUG, SKF, or SRS complaints can be viewed at the links below, or they can be obtained from the court.

DUG Fund Complaint

SKF Fund Complaint

SRS Fund Complaint