Stull, Stull & Brody Announces Class Action Lawsuit on Behalf of Investors in ProShares UltraShort Basic Materials Fund (“SMN Fund”)

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The law firm of Stull, Stull & Brody announces that a class action complaint has been filed in the U.S. District Court for the Southern District of New York on behalf of all persons who purchased or otherwise acquired shares in the ProShares UltraShort Basic Materials Fund SMN, 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 SMN Fund (the “Class”). The action seeks remedies under Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”).

In addition to the claims concerning ProShares SMN Fund, Stull, Stull & Brody is also investigating claims on behalf of investors in other ProShares leveraged funds (the “Funds”) (see list below), such as whether ProShares failed to disclose in its registration statements: (i) that if shares of the Funds were held for a time period longer than one day, the likelihood of massive losses was huge; and (ii) the extent to which performance of the Funds would invariably diverge from the performance of the benchmark.

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

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 SMN Fund is one of ProShares’ UltraShort ETFs. The SMN Fund seeks investment results that correspond to twice the inverse (-200%) of the daily performance of the Dow Jones Basic Materials Index (“DJBMI”). Accordingly, the SMN Fund is supposed to deliver double the inverse of the return of the DJBMI, which fell approximately 52 percent in 2008. Rather than increase approximately 104 percent (double the inverse), the SMN Fund has fallen approximately 3.5 percent in 2008.

The complaint alleges that Defendants violated the Securities Act by failing to disclose the following risks, inter alia, in the Registration Statement: (1) if SMN 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 SMN Fund would inevitably diverge from the performance of the DJBMI -- i.e., the overwhelming probability, if not certainty, of spectacular divergence. Plaintiff in the SMN Action seeks to recover damages on behalf of all Class members who purchased or otherwise acquired shares of ProShares SMN.

If you purchased or otherwise acquired ProShares SMN shares, and either lost money on the transaction or still hold the shares, you may apply to the Court to serve as lead plaintiff in the action no later than February 1, 2010. 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 Stull, Stull & Brody, or other counsel of your choice, to serve as your counsel in this action. Stull, Stull & Brody has litigated many class actions for violations of securities laws in federal courts over the past 40 years and has obtained court approval of substantial settlements on numerous occasions. Stull, Stull & Brody maintains offices in New York and Los Angeles.

If you wish to discuss this action or the investigation regarding any of the Funds listed above, or if you have any questions concerning this notice or your rights or interests with respect to these matters, please contact Aaron Brody, Esq. at Stull, Stull & Brody by e-mail at ssbny@aol.com, or by calling toll-free 1-800-337-4983, or by fax to 1-212-490-2022, or by writing to Stull, Stull & Brody, 6 East 45thStreet, New York, NY 10017. You can also visit our website at www.ssbny.com.

Attorney Advertising. Prior Results Do Not Guarantee A Similar Outcome.

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