ProShares Trust, ProShare Advisors LLC. faces a securities class action lawsuit over alleged violations of Federal Securities Laws on behalf of certain purchasers of the ProShares UltraShort Real Estate (ETF) (Public, NYSE:SRS). An investigation on behalf of current long term investors in ProShares UltraShort Real Estate (ETF) (NYSE:SRS) concerning possible shareholder claims was announced.

An investor in ProShares UltraShort Real Estate (ETF) (Public, NYSE:SRS) has filed a proposed securities class action lawsuit against ProShares Trust, ProShare Advisors LLC, SEI Investments Distribution Co., Michael L. Sapir, Louis M. Mayberg, Russell S. Reynolds, III, Michael Wachs, and Simon D. Collier 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 UltraShort Real Estate ProShares fund (NYSE:SRS), an exchange-traded fund ('ETF') offered by ProShares Trust, pursuant or traceable to ProShares Trust' alleged false and misleading Registration Statement, Prospectuses, and Statements of Additional Information issued in connection with the UltraShort Real Estate ProShares funds shares.

According to the complaint the plaintiff alleges that ProShares Trust, ProShare Advisors LLC, SEI Investments Distribution Co., Michael L. Sapir, Louis M. Mayberg, Russell S. Reynolds, III, Michael Wachs, and Simon D. Collier violated Federal Securities Laws by failing to disclose that the UltraShort Real Estate ProShares fund is altogether defective as a directional investment play, failing to disclose several risks in the Registration Statement, and by misrepresenting and failing to disclose material adverse facts. According to the complaint, the defendants failed to disclose exceptional risks associated with the UltraShort Real Estate ProShares fund and Investors who purchased shares of UltraShort Real Estate ProShares fund may have suffered losses that may be compensable under the law.

The UltraShort Real Estate ProShares fund seeks investment results that correspond to twice the inverse (-200%) daily performance of the Dow Jones U.S. Real Estate Index, which measures the performance of the real estate sector of the U.S. equity market. Accordingly, the SRS Fund is supposed to deliver double the inverse return of the Dow Jones U.S. Real Estate Index, which fell approximately 39.2 percent from January 2, 2008 through December 17, 2008, ostensibly creating a profit for investors who anticipated a decline in the U.S. real estate market. In other words, the UltraShort Real Estate ProShares fund should have appreciated by 78.4 percent during this period. However, the UltraShort Real Estate ProShares fund fell approximately 48.2 percent during this period -- the antithesis of a directional play, so the complaint.

ProShares UltraShort Real Estate, located in Bethesda, MD, seeks daily investment results that correspond to twice the inverse daily performance of the Dow Jones U.S. Real Estate Index, which measures the performance of the real estate sector of the United States equity market. Component companies include those that invest directly or indirectly through development, management or ownership of shopping malls, apartment buildings and housing developments, and real estate investment trusts (REITs) that invest in apartments, office and retail properties. ProShares UltraShort Real Estate shares (NYSE: SRS) traded recently at $12.40 per share, down from a 52weekHigh of $295.72 per share.