Stull, Stull & Brody today announced that it has commenced a class action lawsuit 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 UltraShort SmallCap 600 Fund (NYSE Arca: SDD) (the “SDD Fund”), an exchange-traded fund (“ETF”) offered by ProShares Trust (“ProShares”), pursuant or traceable to ProShares’ allegedly false and misleading Registration Statement, Prospectuses, and Statements of Additional Information (collectively, the “Registration Statement”) issued in connection with shares of the SDD Fund (the “Class”). The Class is seeking to pursue remedies under Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”).

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 Collier as defendants. The complaint alleges that 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 SDD Fund is one of ProShares’ UltraShort ETFs. The SDD Fund seeks daily investment results that correspond to twice (200%) the inverse (opposite) of the daily performance of the S&P SmallCap 600 Index (the “Index”).

The Complaint alleges that the SDD Fund is not a simple investment vehicle, did not track twice the inverse of the Index, and did not perform as described over a period longer than one trading day. The complaint alleges that ProShares and the other defendants violated the Securities Act by failing to disclose the following risks, among others, in the Registration Statement: (1) if the SDD Fund shares were held for a time period longer than one day there is a likelihood of losses; and (2) the extent to which performance of the SDD Fund would inevitably diverge from the performance of the Index.

Plaintiff seeks to recover damages on behalf of all Class members who purchased or otherwise acquired shares of the ProShares SDD Fund. If you purchased or otherwise acquired ProShares SDD shares, and either lost money on the transaction or still hold the shares, you may apply to the Court to serve as lead plaintiff in the action no later than 60 days from today. 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 Stull, Stull & Brody, or other counsel of your choice, to serve as your counsel in this action.

In addition to the claims concerning the ProShares SDD Fund, Stull, Stull & Brody is also investigating potential claims on behalf of investors in other ProShares leveraged funds (the “Funds”) (see list below), such as whether ProShares failed to disclose in its registration statements: (i) the likelihood that damages would result if shares of the Funds were held for a time period longer than one day; and (ii) the extent to which performance of the Funds would invariably diverge from the performance of the benchmark.
Fund       Ticker Symbol
UltraShort Russell3000 (NYSE: TWQ)
UltraShort MidCap400 (NYSE: MZZ)
UltraShort Russell2000 (NYSE: TWM)
UltraPro Short S&P500 (NYSE: SPXU)
UltraShort Russell1000 Value (NYSE: SJF)
UltraShort Russell1000 Growth (NYSE: SFK)
UltraShort Russell MidCap Growth (NYSE: SDK)
UltraShort Russell2000 Value (NYSE: SJH)
UltraShort Consumer Goods (NYSE: SZK)
UltraShort Consumer Services (NYSE: SCC)
UltraShort Health Care (NYSE: RXD)
UltraShort Industrials (NYSE: SIJ)
UltraShort Semiconductors (NYSE: SSG)
UltraShort Technology (NYSE: REW)
UltraShort Telecommunications (NYSE: TLL)
UltraShort Utilities (NYSE: SDP)
UltraShort MSCI EAFE (NYSE: EFU)
UltraShort MSCI Europe (NYSE: EPV)
UltraShort MSCI Pacific ex-Japan (NYSE: JPX)
UltraShort MSCI Brazil (NYSE: BZQ)
UltraShort MSCI Japan (NYSE: EWV)
UltraShort MSCI Mexico Investable Market (NYSE: SMK)
UltraShort 7-10 Year Treasury (NYSE: PST)
UltraShort 20+ Year Treasury (NYSE: TBT)
UltraShort DJ-UBS Commodity (NYSE: CMD)
UltraShort Gold (NYSE: GLL)
UltraShort Silver (NYSE: ZSL)
UltraShort Euro (NYSE: EUO)
UltraShort Yen (NYSE: YCS)
Ultra Dow30 (NYSE: DDM)
Ultra S&P500 (NYSE: SSO)
Ultra Russell3000 (NYSE: UWC)
Ultra MidCap400 (NYSE: MVV)
Ultra SmallCap600 (NYSE: SAA)
Ultra Russell2000 (NYSE: UWM)
UltraPro S&P500 (NYSE: UPRO)
Ultra Russell1000 Value (NYSE: UVG)
Ultra Russell1000 Growth (NYSE: UKF)
Ultra Russell MidCap Value (NYSE: UVU)
Ultra Russell MidCap Growth (NYSE: UKW)
Ultra Russell2000 Value (NYSE: UVT)
Ultra Russell2000 Growth (NYSE: UKK)
Ultra Consumer Goods (NYSE: UGE)
Ultra Consumer Services (NYSE: UCC)
Ultra Health Care (NYSE: RXL)
Ultra Industrials (NYSE: UXI)
Ultra Real Estate (NYSE: URE)
Ultra Semiconductors (NYSE: USD)
Ultra Technology (NYSE: ROM)
Ultra Telecommunications (NYSE: LTL)
Ultra Utilities (NYSE: UPW)
Ultra DJ-UBS Commodity (NYSE: UCD)
Ultra DJ-UBS Crude Oil (NYSE: UCO)
Ultra Gold (NYSE: UGL)
Ultra Silver (NYSE: AGQ)
Ultra Euro (NYSE: ULE)
Ultra Yen (NYSE: YCL)
Ultra MSCI EAFE (NYSE: EFO)
Ultra MSCI Emerging Markets (NYSE: EET)
Ultra FTSE/Xinhua China 25 (NYSE: XPP)
Ultra MSCI Japan (NYSE: EZJ)

Stull, Stull & Brody has litigated many class actions for violations of securities laws in federal courts over the past 40 years and has obtained court approval of substantial settlements on numerous occasions. Stull, Stull & Brody has offices in New York and Los Angeles.

If you wish to discuss this action, or if you have any questions concerning this notice or your rights or interests with respect to these matters, please contact Aaron Brody, Esq. at Stull, Stull & Brody by e-mail at ssbny@aol.com, or by calling toll-free 1-800-337-4983, or by fax to 1-212-490-2022, or by writing to Stull, Stull & Brody, 6 East 45 th Street, New York, NY 10017. You can also visit our website at www.ssbny.com.

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Copyright Business Wire 2010