ETF News: Zamansky & Associates LLC and Lovell Stewart Halebian Jacobson LLP File Class Action Lawsuit Against ProShares’ Ultra ProShares Nasdaq-100 Fund (NYSE: QLD)

Zamansky & Associates LLC and Lovell Stewart Halebian Jacobson LLP filed a class action lawsuit on April 9, 2010 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 ProShares Ultra QQQ Fund (the “QLD Fund”) (NYSE: QLD), an exchange-traded fund (“ETF”) offered by ProShares Trust (“ProShares”), pursuant or traceable to ProShares’ false and misleading Registration Statements, Prospectuses, and Statements of Additional Information (collectively, the “Registration Statement”) issued in connection with the QLD 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 bought shares in the QLD Fund pursuant to the Registration Statement and would like to consider serving as lead plaintiff or have any questions about the lawsuit, please contact Edward H. Glenn, Jr., Esq. of Zamansky & Associates LLC at 212-742-1414, or via email at [email protected] Lead Plaintiff motion papers must be filed with the United States District Court for the Southern District of New York no later than June 21, 2010. A Lead Plaintiff is a court-appointed representative for absent class members. You do not need to seek appointment as Lead Plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action.

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 QLD Fund is one of ProShares’ Ultra ETFs. The QLD Fund seeks investment results that correspond to twice (200%) the daily performance of the Nasdaq-100 Index (“Nasdaq-100”), which measures the performance of the largest 100 domestic and international non-financial securities listed on The Nasdaq Stock Market based on market capitalization. Accordingly, the QLD Fund is supposed to deliver double the return of the Nasdaq-100, which gained approximately 33 percent in the first seven months of 2009. In other words, the QLD Fund should have appreciated by 66 percent during this period. However, the QLD Fund actually fell approximately 35 percent during this period — the antithesis of a directional play.

The complaint alleges that the Defendants violated the Securities Act by failing to disclose that the QLD Fund is altogether defective as a directional investment play. Defendants failed to disclose the following risks in the Registration Statement: (1) the leveraged directional correlation between the QLD Fund and the Nasdaq-100 over time would only happen in the rarest of circumstances, and inadvertently if at all; (2) the extent to which performance of the QLD Fund would inevitably diverge from the performance of the Nasdaq-100 — i.e., the probability, if not certainty, of spectacular tracking error; (3) the severe consequences of high market volatility on the QLD Fund’s investment objective and performance; (4) the severe consequences of inherent path dependency in periods of high market volatility on the QLD Fund’s performance; (5) the role the QLD Fund plays in increasing market volatility, particularly in the last hour of trading; (6) the QLD Fund causes dislocations in the stock market; and (7) the QLD Fund offers a seemingly straightforward way to obtain desired exposure, but such exposure is not attainable through the QLD Fund.

Plaintiff is represented by the law firms of Zamansky & Associates LLC and Lovell Stewart Halebian Jacobson LLP, two of the country’s premier national law firms that represent institutional and individual investors in class action, complex securities and corporate governance litigation. The firms have achieved many notable results for investors over many years, including some of the largest awards ever made under the antitrust, securities and commodities laws, and have been recognized for their reputation for excellence in class actions and arbitrations by many courts. More information is available about Zamansky & Associates LLC at and about Lovell Stewart Halebian Jacobson LLP at


Zamansky & Associates LLC
Edward H. Glenn, Jr., Esq.
Fax: 212-742-1177

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