Judge Dismisses ProShares ETF Lawsuit

ProShares announced Monday that the U.S. District Court for the Southern District of New York dismissed, in its entirety, the class-action lawsuit filed against the company in 2009, which claimed certain risks associated with holding leveraged and inverse ETFs for periods longer than one day were omitted from the disclosures set forth in the registration statements.

“We have maintained since the beginning of this case that the allegations were wholly without merit, and we are pleased that the claims have been dismissed in their entirety,” said Amy Doberman, ProShares’ general counsel, in a statement. “ProShares has demonstrated a longstanding commitment to educating investors about our products and their risks and benefits, so it is gratifying that Judge Koeltl’s ruling rests on the strength and quality of our disclosures.”

In his order dismissing the case, Judge John G. Koeltl ruled that the registration statements accompanying ProShares leveraged and inverse ETFs stated “in plain English” their daily performance objectives and clearly disclosed the possibility that “the ETFs’ value could diverge significantly from the underlying index when the ETFs were held for longer than one day.”