New York, NY 8/28/2009 4:07:28 AM
BERNSTEIN LIEBHARD LLP FILES CLASS ACTION LAWSUIT ON BEHALF OF INVESTORS IN PROSHARES ULTRASHORT REAL ESTATE PROSHARES FUND (SYMBOL: SRS)
Bernstein Liebhard LLP filed a class action lawsuit on August 27, 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 Real Estate ProShares fund (the “SRS 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 SRS Fund (the “Class”). The Class is seeking to pursue remedies under Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”). Bernstein Liebhard LLP is also investigating claims concerning other leveraged ETFs sold by ProShares.
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 SRS Fund is one of ProShares’ UltraShort ETFs. The SRS Fund seeks investment results that correspond to twice the inverse (–200%) daily performance of the Dow Jones U.S. Real Estate Index (“DJREI”), which measures the performance of the real estate sector of the U.S. equity market. Accordingly, the SRS Fund is supposed to deliver double the inverse return of the DJREI, which fell approximately 39.2 percent from January 2, 2008 through December 17, 2008, ostensibly creating a profit for investors who anticipated a decline in the U.S. real estate market. In other words, the SRS Fund should have appreciated by 78.4 percent during this period. However, the SRS Fund actually fell approximately 48.2 percent during this period—the antithesis of a directional play.
The complaint alleges the Defendants violated the Securities Act by failing to disclose the following risks in the Registration Statement: (1) if SRS Fund shares were held for a time period longer than one day, the likelihood of catastrophic losses was huge; (2) the extent to which performance of the SRS Fund would inevitably diverge from the performance of the DJREI—i.e., the overwhelming probability, if not certainty, of spectacular divergence; (3) the severe consequences of high market volatility on the SRS Fund’s investment objective and performance; (4) the severe consequences of inherent path dependency in periods of high market volatility on the SRS Fund’s performance; (5) the role the SRS Fund plays in increasing market volatility, particularly in the last hour of trading; (6) the consequences of the SRS Fund’s daily hedge adjustment always going in the same direction as the movement of the underlying index, notwithstanding that it is an inverse leveraged ETF; and (7) the SRS Fund causes dislocations in the stock market.
Plaintiff seeks to recover damages on behalf of all Class members who purchased or otherwise acquired shares of the SRS Fund. If you purchased or otherwise acquired SRS Fund 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 October 5, 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 would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential Class member or lead plaintiff, please contact Christian Siebott or Joseph R. Seidman, Jr. at (877) 779-1414.
Bernstein Liebhard 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 complaint online at http://www.bernlieb.com, or obtain it from the court.
Bernstein Liebhard LLP
10 East 40th Street
New York, New York 10016
(877) 779-1414
www.bernlieb.comATTORNEY ADVERTISING. © 2009 Bernstein Liebhard LLP. The law firm responsible for this advertisement is Bernstein Liebhard LLP, 10 East 40th Street, New York 10016, (212) 779-1414. Prior results do not guarantee or predict a similar outcome with respect to any future matter.
Contact Information:
Christian Siebott
Joseph R. Seidman, Jr.
Bernstein Liebhard LLP
http://www.bernlieb.com(212) 799-1414
