Napoli Bern Ripka LLP Investigates Arbitration Claims Against Proshares Trust

The ecurities Fraud Department Napoli Bern Ripka LLP is investigating arbitration claims on behalf of individuals who lost money investing in Proshares Ultrashort Financials Fund (the “SKF Fund”), a leveraged exchange traded fund (“ETF”) offered by Proshares Trust.

Proshares Trust, the fifth largest provider of ETF’s in the United States, manages approximately 99 percent of the country’s leveraged ETF’s. Leveraged ETF’s, such as the SKF fund, track an underlying benchmark of an index or security. Leveraged ETF’s seek to achieve a return that is a multiple of the performance of the index that the ETF tracks. By doing so, all leveraged ETF’s are designed to generate daily returns that are a positive or negative multiple of the daily return of the specified index.

Proshares SKF Fund seeks investment results that correspond to twice the inverse daily performance of the Dow Jones U.S. Financials Index “(DJFIX”), which measures the performance of the financial services industry of the U.S. equity market. From January 2, 2008 to December 17, 2008, the DJFIX fell approximately 51.03%. Thus, the SKF Fund should have appreciated by 102.06% during this period. Instead, the SKF fund appreciated only by 1.06%. Similarly, a .41% increase in July 2009 of the DJFIX, which should have resulted in a decrease of .82%, ironically led to a 65.79% depreciation of the SKF Fund. As a result, the SKF Fund did not provide the advertised results promoted by Proshares Trust.

Napoli Bern Ripka LLP is currently investigating whether Proshares Trust was in violation of the Securities Act by providing a false and misleading registration statement and prospectus issued in connection issued with the SKF Fund. Although Proshares Trust implied that investors could use the SKF Fund as a successful long-term investment strategy, the Financial Industry Regulatory Authority (“FINRA”) has announced that leveraged ETF’s are “typically unsuitable for retail investors who plan to hold them for longer than one trading session, particularly in volatile markets.” Investors allege that the sales materials offered by Proshares Trust were not truthful, accurate, and misled the investor in regards to the SKF Fund.

Napoli Bern Ripka LLP has a nationally recognized securities arbitration practice and represents both individual and institutional investors across the cournty. If you invested in the Proshares Trust SKF Fund or any other similar leveraged ETF Fund, please contact Adam J. Gana at (212) 267-3700 for a free consultation.

Napoli Bern Ripka, LLP
Adam J. Gana, Esq.
(212) 267-3700
agana@napolibern.com