Stockholders v Proshares Trust : ProShares UltraShort S&P 500 Fund
Proshares Trust : ProShares UltraShort S&P 500 Fund
According to a press release dated November 10, 2009, 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 SDS Fund is one of ProShares UltraShort ETFs. The SDS Fund seeks investment results that correspond twice (200%) the inverse (opposite) of the daily performance of the S&P 500 Index. Accordingly, the SDS Fund is supposed to deliver double the inverse of the return of the S&P 500 Index, which increased approximately six percent from January 1, 2009 through July 30, 2009. In other words, the SDS Fund should have declined by twelve percent during this period. However, the SDS Fund fell approximately 29 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 SDS 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 SDS Fund would inevitably diverge from the performance of the S&P 500 Index -- i.e., the overwhelming probability, if not certainty, of spectacular divergence.
If you bought Proshares Trust : ProShares UltraShort S&P 500 Fund securities and would like to obtain information about the Proshares Trust : ProShares UltraShort S&P 500 Fund lawsuit, then you are invited to call Kahn Swick & Foti, LLC toll free at (866) 467-1400 extension 100 to speak with an attorney or visit www.ksfcounsel.com
