Stockholders v ProShares Trust : UltraShort Oil and Gas Fund
Stockholders File Lawsuit Against ProShares Trust : UltraShort Oil and Gas Fund
According to a press release dated September 30, 2009, 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 DUG Fund is one of ProShares' UltraShort ETFs. The DUG Fund seeks investment results that correspond to twice the inverse (-200%) daily performance of the Dow Jones U.S. Oil and Gas Index ("DJOGI").
Accordingly, the DUG Fund is supposed to deliver double the inverse return of the DJOGI, which fell approximately 37 percent from January 2, 2008 through December 31, 2008, ostensibly creating a profit for investors who anticipated a decline in the U.S. Oil and Gas market. In other words, the DUG Fund should have appreciated by over 74 percent during this period. However, the DUG Fund fell approximately 30 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 DUG 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 DUG Fund would inevitably diverge from the performance of the DJOGI -- i.e., the overwhelming probability, if not certainty, of spectacular divergence.
If you bought ProShares Trust : UltraShort Oil and Gas Fund securities and would like to obtain information about the ProShares Trust : UltraShort Oil and Gas 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.
