Pearson, Simon, Warshaw & Penny, LLP and Tydings & Rosenberg, LLP Announce Filing of Class Action Lawsuit Against ProShares' UltraShort Financials ProShares Fund
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SAN FRANCISCO--(Business Wire)-- Pearson, Simon, Warshaw & Penny, LLP and Tydings & Rosenberg, LLP filed a class action lawsuit (the "Complaint") on August 31, 2009 in the United States District Court for the District of Maryland on behalf of all persons who purchased or otherwise acquired shares of the UltraShort Financials ProShares Fund ("SKF"). SKF is an exchange-traded fund ("ETF") offered by ProShares Trust to investors pursuant to a materially false and misleading registration statement filed with the Securities and Exchange Commission. Persons who bought shares of SKF are members of the Plaintiff Class (the "Class") as defined in the Complaint. Plaintiff seeks to recover losses, on behalf of the Class, under Sections 11 and 15 of the Securities Act of 1933 (the "Securities Act"). If you are a member of the Class, you have the right to seek to be appointed by the United States District Court as the lead plaintiff in this class action on behalf of purchasers of SKF shares. Any request to be appointed as lead plaintiff must be filed with the United States District Court for the District of Maryland no later than October 30, 2009. As lead plaintiff, you would be required to act as the representative of all absent class members. Your right to share in any recovery obtained in this action is not affected by whether you seek to be appointed lead plaintiff. If you would like more information regarding the Complaint or your rights as a member of the Class, please contact George S. Trevor, Esq. at the Pearson, Simon, Warshaw & Penny law firm at (415) 433-9000, or via email at email@example.com. You may view a copy of the Complaint online at http://www.pswplaw.com. You may also retain counsel of your choice to represent you in this action. The Complaint alleges that the registration statement filed by ProShares Trust, pursuant to which SKF shares were sold to investors, failed to adequately disclose that SKF shares should not be held more than a single trading day and were not an appropriate hedge against a decline in U.S.-based financial stocks. SKF is an inverse leveraged ETF that seeks investment returns that are two times the inverse performance of the Dow Jones U.S. Financials Index (the "DJFI"), which is a benchmark index for large U.S. banks and insurance companies. Defendants represented that SKF was an investment that provided a hedge against a decline in the stocks constituting the DJFI. Yet, as the DJFI declined substantially in 2008, SKF also declined contrary to the representations made by Defendants. For example, in a six week period from September 15, 2008 through October 31, 2008, the DJFI declined by over 17%. Despite a reasonable expectation based upon Defendants' disclosures that SKF would rise by up to 34% during this period, SKF actually fell by nearly 6%. The Complaint names as defendants ProShares Trust; ProShare Advisors, LLC; Louis M. Mayberg; Michael L. Sapir; Russell S. Reynolds, III; Michael Wachs; Simon D. Collier; and SEI Investments Distribution Co. ("Defendants"). The Complaint alleges that Defendants violated the Securities Act by filing a registration statement for SKF that contained materially false and misleading statements. As set forth in more detail in the Complaint, Defendants failed to disclose the following risks: (a) the mathematical probability that SKF's performance will fail to track the performance of the DJFI over any period longer than a single trading day; (b) that the greater volatility experienced by the DJFI will result in SKF underperforming the DJFI by a material amount; (c) that SKF is not a directional play on the performance of U.S. financial stocks, but dependent on the volatility and path the DJFI takes over any time period greater than a single day; (d) that SKF was not a simple investment that could be used over time to hedge against a downturn in U.S. financial stocks; (f) that based upon the mathematics of compounding, the volatility of the DJFI and probability theory SKF was highly unlikely to achieve its stated investment objectives over time periods longer than a single trading day. The law firm of Pearson, Simon, Warshaw & Penny has offices in San Francisco and Los Angeles, California. The firm's principle attorneys have represented institutions, public entities and individual investors in complex securities litigation, and collectively the firm's senior attorneys have over 50 years of experience in such cases. You may obtain more information about the firm at www.pswplaw.com. Pearson, Simon, Warshaw & Penny LLP George S. Trevor, 415-433-9000 firstname.lastname@example.org Copyright Business Wire 2009
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