Bernstein Liebhard LLP filed a class action lawsuit on October 13, 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 Ultra Financials Fund (the “UYG 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 UYG 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 UYG Fund is one of ProShares’ Ultra ETFs. The UYG Fund seeks investment results that correspond to twice (+200%) the daily performance of the Dow Jones U.S. Financial Index (“DJUSFI”). Accordingly, the UYG Fund is supposed to deliver double the return of the DJUSFI, which, from January 1, 2009 through July 30, 2009, increased approximately 1.47 percent. Rather than increase approximately 2.9 percent (double), however, the UYG Fund has fallen approximately 25 percent.
The complaint alleges the Defendants violated the Securities Act by failing to disclose the following risks, inter alia, in the Registration Statement: (1) if UYG 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 UYG Fund would inevitably diverge from the performance of the DJUSFI—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, DUG, and DXD 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 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 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 |
Plaintiff in the UYG Action seeks to recover damages on behalf of all Class members who purchased or otherwise acquired shares of ProShares UYG. If you purchased or otherwise acquired ProShares UYG 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 23, 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 SRS, SKF, DUG, DXD or UYG Funds or any of the Funds, and either lost money on the transaction or still hold the shares, please contact Christian Siebott or Joseph R. Seidman, Jr. at (877) 779-1414.
The current lead plaintiff deadline are as follows:
SKF Fund-10/20/09EEV Fund-11/3/09DUG, UYG, SDS, FXP and SCO Funds-11/23/09 DXD-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 seven years.
A copy of the complaint can be viewed here, or can be obtained from the court upon request.