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Unformatted text preview: UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK MARl( E. KAISER and HUET TSHIN KAISER, on Behalf of Themselves and All Others Similarly Situated, Plaintiffs, v. PROSHARES TRUST; PROSHARE ADVISORS LLC; SEI INVESTMENTS DISTRIBUTION CO.; MICHAEL L. SAPIR; LOUIS M. MA YBERG; RUSSELL S. REYNOLDS, III; MICHAEL WACHS; and SIMON D. COLLIER, JUDGECROrn CLASS ACTION COl\1PLAINT JURY TRIAL DEMANDED Plaintiffs, individually and on behalf of all others similarly situated, by their attorneys, allege the following upon information and belief, except for those allegations as to themselves, which are alleged upon personal knowledge. The allegations are based on counsel's investigation, documents filed with the United States Government and Securities and Exchange Commission (the "SEC"), reports and interviews published in the press, and information obtained by Plaintiffs. NATURE OF THE ACTION 1. This is a class action on behalf of all persons who purchased or otherwise acquired shares in the ProShares Ultrashort S&P 500 Fund (the "SDS Fund"), an exchange- traded fund ("ETF") offered by Defendant ProShares Trust C'ProShares" or the "Trust"), pursuant or traceable to ProShares' false and misleading Registration Statement, Prospectuses, and/or Statements of Additional Infonnation (collectively, the "Registration Statement") issued in connection with theSDS Fund's shares (the "Class"). The Class is seeking to pursue remedies 1 under Sections 11 and 15 of the Securities Act of 1933 (the "Securities Act"). This action asserts strict liability and negligence claims against Defendants (defined below). 2. ProShares consists of a series of ETFs, including the SDS Fund. ETFs, regulated by the SEC under the Investment Company Act of 1940, are low-cost funds that track a particular stock index and trade like stock. Non-traditional, or so-called "leveraged" and/or "inverse" ETFs, such as the SDS Fund, have exploded in popularity over the last few years, offering investors altemate vehicles to take bullish, bearish, and leveraged positions on popular stock indices. Available in a number of different forms, non-traditional ETFs have attracted increasingly significant investor assets. 3. ProShares is the fifth largest provider of ETFs in the United States. ProShares designs each of its ETFs to correspond to the performance of a daily benchmark such as the price performance, the inverse of the price performance, or a multiple of the inverse of the price performance - of an index or security. ProShares' ETFs are essentially divided into two categories: Ultra and UltraShort. 4. ProShares sells its Ultra and UltraShort ETFs as "simple" directional plays. 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 SDS Fund is one of ProShares' UltraShort ETFs, hence its eponym....
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This note was uploaded on 04/06/2010 for the course FIN 100 taught by Professor Staff during the Fall '08 term at Penn State.
- Fall '08