Bringing you live news and features since 2006 

Class action filed against ProShares UltraShort Basic Materials fund

RELATED TOPICS​

Bernstein Liebhard has filed a class action lawsuit on behalf of all persons who purchased shares in the UltraShort Basic Materials fund, an exchange-traded fund offered by ProShares Trust, pursuant or traceable to ProShares’ false and misleading registration statement.

The class is seeking to pursue remedies under Sections 11 and 15 of the Securities Act of 1933.

The complaint, filed in the US District Court for the Southern District of New York, names ProShares, ProShare Advisors, SEI Investments Distribution, Michael L. Sapir, Louis M. Mayberg, Russell S. Reynolds III, Michael Wachs, and Simon D. Collier, as 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 UltraShort Basic Materials fund seeks investment results that correspond to twice the inverse (-200 per cent) of the daily performance of the Dow Jones US Basic Materials Index. Accordingly, the fund is supposed to deliver double the inverse return of the index, which fell in approximately 52 per cent in 2008. Rather than increase approximately 104 per cent (double the inverse), the fund has fallen approximately 3.5 per cent in 2008.

The complaint alleges the defendants violated the Securities Act by failing to disclose the following risks in the registration statement: if shares were held for a time period longer than one day the likelihood of catastrophic losses was huge; and the extent to which performance of the fund would inevitably diverge from the performance of the index.

Latest News

Despite collectively owning nearly USD1.3 trillion in ETF assets, institutions (e.g., insurance general accounts, state and local defined benefit plans,..
iShares has launched the € High Yield Corp Bond ESG Paris-Aligned Climate UCITS ETF, HYPE, and the dollar version HYDP...
HANetf has announced the launch of Sprott Copper Miners ESG-Screened UCITS ETF (ticker: CPPR), designed to offer investors pure-play and..
Scalable Capital, a digital investment platform in Europe, has announced the closing of a EUR60 million equity financing. This extension..

Related Articles

Laurent Kssis, CEC Capital
Laurent Kssis, CEC Capital, and veteran of the crypto fund market, has written a note on the current momentum in...
Axel Lomholt, STOXX
Celebrating the 25th birthday of its first index this year, index provider STOXX, 80 per cent owned by Deutsche Boerse,...
Bitcoins
The digital asset fund flows report from CoinShares this week reports that digital asset inflows totalled USD176 million last week,...
Katie Stockton, Fairlead Strategies
Connecticut-based Fairlead Strategies was the first ETF of ETFs winner in the ETF Express US awards, representing a new development...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by