Direxion Shares ETF Trust : Direxion Daily Financial Bear 3X Shares and Direxion Energy Bear 3X Shares Fund

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Direxion Shares ETF Trust : Direxion Daily Financial Bear 3X Shares and Direxion Energy Bear 3X Shares Fund Summary: According to a press release dated September 18, 2009, the complaint alleges the Defendants violated the Securities Act by failing to disclose that the FAZ Fund is altogether defective as a directional investment play. Defendants failed to disclose the following risks in the Company's Registration Statement: (1) inverse correlation between the FAZ Fund and the RFSI over time would only happen in the rarest of circumstances, and inadvertently, if at all; (2) the extent to which performance of the FAZ Fund would inevitably diverge from the performance of the RFSI -- i.e., the probability, if not certainty, of spectacular tracking error; (3) the severe consequences of high market volatility on the FAZ Fund's investment objectives and performance; (4) the severe consequences of inherent path dependency in periods of high market volatility on the FAZ Fund's performance; (5) the role the FAZ Fund plays in increasing market volatility, particularly in the last hour of trading; (6) the consequences of the FAZ Fund's daily hedge adjustment always going in the same direction as the movement of the underlying index, notwithstanding that it is an inverse leveraged ETF; (7) the FAZ Fund causes dislocations in the stock market; and (8) the FAZ Fund offers a seemingly straightforward way to obtain desired exposure, but such exposure is not attainable through the FAZ Fund.

The FAZ Fund seeks investment results that correspond to three times the inverse (-300%) daily performance of the Russell 1000 Financial Services Index ("RFSI"), which measures the performance of the financial services sector of the U.S. equity market.

The Direxion: ERY Fund also filed the Southern District of New York, captioned: Howard Schwack, et al. v. Direxion Shares ETF Trust, et al., file number: 10-CV-00271, occurred as follows:

According to the press release dated January 13, 2010, the complaint alleges that given the spectacular tracking error between the performance of the Energy Bear Fund and its benchmark index, the fact that Plaintiff and the Class sought to protect their assets by investing their monies on the correct directional play has been rendered meaningless. The Energy Bear Fund is, therefore, the equivalent of a defective product. The Energy Bear Fund did not do what it was designed to do, represented to do, or advertised to do.

Direxion Shares’ Registration Statement did not disclose that the Energy Bear Fund is altogether defective as a directional investment play; it did not track three times the inverse of the Russell Energy Index on a daily basis, nor for periods longer than one trading day. In order to sufficiently and accurately disclose this counterintuitive reality, the Registration Statement would have had to clearly explain that, notwithstanding the name of the Energy Bear Fund, the investment objective of the Energy Bear Fund and the purpose of Direxion Shares’ ETFs generally, the Energy Bear Fund would perform precisely the opposite of investors’ reasonable expectations.

In ignorance of the false and misleading nature of the statements described in the complaint, plaintiff and the other members of the Class relied, to their detriment, on the integrity of the market price of the Energy Bear Fund shares. Had plaintiff and the other members of the Class known the truth, they would not have purchased said shares, or would not have purchased them at the inflated prices that were paid.

On August 16, 2010, a Corrected Memorandum Opinion and Order was issued by the Court Consolidating the cases under one master file and appointed Evan Stoopler as lead plaintiff, and Federman & Sherwood as lead counsel, to represent holders of the FAZ Fund. The Court also appointed Howard Schwack and William Lee are appointed as co-lead plaintiffs, and Wolf Haldenstein Adler Freeman & Herz LLP and Gilman and Pastor LLP are appointed as co-lead counsel, to represent holders of the ERY Fund.

On November 23, 2010, a First Consolidated Amended Class Action Complaint was filed by the lead plaintiffs against the defendants. The plaintiffs filed a Second Consolidated Amended Class Action Complaint was filed on April 8, 2011.

INDUSTRY CLASSIFICATION:
SIC Code: 0000
Sector: Financial
Industry: Misc. Financial Services

COMPANY/ISSUER NAME:	Direxion Shares ETF Trust
COMPANY/ISSUER TICKER:	FAZ
COMPANY WEBSITE:	http://direxionshares.com/index.html

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Evan Stoopler, et al. v. Direxion Shares ETF Trust, et al.

COURT: S.D. New York	DOCKET NUMBER: 09-CV-08011
JUDGE NAME: Hon. Andrew J. Peck
DATE FILED: 09/18/2009	SOURCE:
CLASS PERIOD START: 11/03/2008	CLASS PERIOD END: 04/09/2009
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Lutovich Law, LLC P.O. Box 410783, Clayton, OH, 63141 (voice) 314-898-3054, (fax) 314-880-7755, _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint
Type: Complaint		Date on the document: 09/18/2009
Corrected Memorandum Opinion and Order
Type: Order		Date on the document: 08/16/2010

REFERENCE COMPLAINT

In Re: Direxion Shares ETF Trust

COURT: S.D. New York	DOCKET NUMBER: 09-CV-08011
JUDGE NAME:
DATE FILED: 11/23/2010	SOURCE:
CLASS PERIOD START: 09/17/2008	CLASS PERIOD END: 04/09/2009
TYPE OF COMPLAINT: First Amended and Consolidated
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Federman & Sherwood (Dallas) 2926 Maple Avenue, Suite 200, Dallas, TX, 75201 (voice) , (fax) , Gilman & Pastor LLP (Old Boston) 225 Franklin Street, 16th Floor, Boston, MA, 02110 (voice) 1.888.211.6830, (fax) , Wolf Haldenstein Adler Freeman & Herz LLP (San Diego) Symphony Towers; 750 B Street, Suite 2770, San Diego, CA, 92101 (voice) 619.239.4599, (fax) 19.239.4599, _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 3

DOCUMENTS FOR THE REFERENCE COMPLAINT
First Consolidated Amended Class Action Complaint
Type: Complaint		Date on the document: 11/23/2010
U.S. District Court Civil Docket
Type: Docket		Date on the document: 02/17/2011
Second Consolidated Amended Class Action Complaint
Type: Complaint		Date on the document: 04/08/2011
U.S. District Court Civil Docket
Type: Docket		Date on the document: 04/08/2011
U.S. District Court Civil Docket
Type: Docket		Date on the document: 04/08/2011
U.S. District Court Civil Docket
Type: Docket		Date on the document: 08/15/2011
U.S. District Court Civil Docket
Type: Other		Date on the document: 11/09/2011

OTHER DOCUMENTS
Class Action Complaint - Jury Trial Demanded
Case Name and/or Number: Milton Pfeiffer, et al. v. Direxion Shares ETF Trust, et al.
Type: Complaint		Date on the document: 10/02/2009
Class Action Complaint - Trial by Jury Demanded
Case Name and/or Number: Thomas C. Longman, et al. v. Direxion Shares ETF Trust, et al.
Type: Complaint		Date on the document: 10/05/2009
Class Action Complaint
Case Name and/or Number: Howard Schwack , et al. v. Direxion Shares ETF Trust, et al.
Type: Complaint		Date on the document: 01/13/2010
U.S. District Court Civil Docket
Case Name and/or Number: Howard Schwack , et al. v. Direxion Shares ETF Trust, et al.
Type: Docket		Date on the document: 04/19/2010
U.S. District Court Civil Docket
Case Name and/or Number: Evan Stoopler, et al. v. Direxion Shares ETF Trust, et al.
Type: Docket		Date on the document: 08/17/2010

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