Berger & Montague Announces that 20 Days Remain for Investors in UltraShort Financial ProShares (SKF) to Move the Court to Serve as Lead Plaintiff

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September 30, 2009 2:48pm NYSE:SKF

timerunningoutPHILADELPHIA–(BUSINESS WIRE)–Berger & Montague, P.C. filed a class action lawsuit on September 25, 2009 in the United States District Court for the Southern District of New York, on behalf of all persons who purchased shares in the UltraShort Financials ProShares Fund (SKF) (the “SKF Fund”)


, an exchange-traded fund (“ETF”) offered by ProShares Trust (“ProShares”), pursuant to ProShares’ false and misleading Registration Statement, Prospectus, and Statements of Additional Information (collectively, the “Registration Statement”) issued in connection with the SKF Fund’s shares (the “Class”). The Class is seeking to pursue remedies under Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”).

If you sustained substantial losses on your purchases of the SKF Fund and would like to consider serving as lead plaintiff, or have any questions about the lawsuit, please contact Barbara A. Podell, Esquire of Berger & Montague, P.C. at 888-891-2289, or via email at [email protected] Lead Plaintiff motion papers must be filed no later than October 20, 2009. A Lead Plaintiff is a court-appointed representative who acts on behalf of other class members in directing the litigation.

If you are a member of this class, you can view a copy of the complaint online at www.bergermontague.com.

ProShares sell its UltraShort ETFs like the SKF Fund, as “simple” directional pays. As marketed by ProShares, UltraShort ETFs are designed to go up when markets go down. The SKF Fund seeks investment results that correspond to twice the inverse (-200%) daily performance of the Dow Jones U.S. Financials Index (“DJFI”). The complaint alleges that, although ProShares represents that the SKF Fund delivers double the inverse return of the DJFI, the Fund is defective as a directional play or a hedge. For example, from September 15, 2008 through October 31, 2008, a period of extreme financial tumult in the U.S. financials markets, the DJFI fell 17.37%. The SKF Fund should have appreciated by 34.74%, according to Defendants’ representations, but it actually fell 5.98% during this period. Therefore, SKF performed nearly the opposite of how it was represented and marketed.

The complaint alleges the Defendants violated the Securities Act by failing to disclose that the SKF Fund is defective as a directional investment play and fails to perform anywhere near investors’ reasonable expectations. Defendants failed to disclose the following risks in the Registration Statement: (i) 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; (ii) that greater volatility experienced by the DJFI will result in SKF underperforming the DJFI by a material amount; (iii) that SKF is not a directional play on the performance of financial stocks, but instead is dependent on the volatility and path the DJFI takes over any time period greater than a single day; (iv) that SKF was not a simple investment that could be used over time to hedge against a downturn in financial stocks; and (v) that based upon the mathematics of compounding and the volatility of the DJFI, SKF was highly unlikely to achieve its stated investment objectives over time periods longer than a single trading day.

For more information about this case and the Lead Plaintiff selection process, please contact:

Sherrie R. Savett, Esq.
Barbara A. Podell, Esq.
Phyllis M. Parker, Esq.
Eric Lechtzin, Esq.
Kimberly A. Walker, Investor Relations Manager
BERGER & MONTAGUE, P.C.
1622 Locust Street
Philadelphia, PA 19103
Telephone: 1-888-891-2289 or 215-875-3000

Berger & Montague, founded in 1970, is a pioneer in class action litigation. The firm’s approximately 60 attorneys concentrate their practice in complex litigation, including securities fraud and corporate governance, antitrust, civil rights, consumer protection and environmental and mass torts, and have recovered billions of dollars for consumers and investors.

 

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