Plaintiff's law firm issued a press release on January 29, 2019, announcing the filing of the Complaint. According to the press release, the Complaint charges ProShares Trust II, ProShares Capital Management LLC, certain of their officers and/or directors and the underwriters of SVXY shares offered for sale during the Class Period with violations of the Securities Exchange Act of 1934 and the Securities Act of 1933. The CBOE Volatility Index, or “VIX,” seeks to measure the expected volatility of the S&P 500. The Fund is benchmarked to the S&P 500 VIX Short-Term Futures Index (the “Index”), an investable index of VIX futures contracts. The investment objective for the Fund during the Class Period was to achieve results for a single day that matched (before fees and expenses) the inverse (-1x) of the daily performance of the Index.
The Complaint alleges that, in the Registration Statement and during the Class Period, Defendants made false and misleading statements and/or failed to disclose adverse information regarding the risks of investing in the Fund. Specifically, the Registration Statement failed to disclose that the Fund was threatened with catastrophic losses as a result of the Fund’s flawed design and the low-volatility environment and acute liquidity risks that existed during the Class Period. In addition, during the Class Period, Defendants made substantially similar false and misleading statements as those contained in the Registration Statement in numerous financial reports and draft prospectuses and registration statements filed with the SEC.
On April 29, 2019, the Court issued Orders consolidating cases under Docket 19-CV-00886 and appointing Lead Plaintiffs and Counsel. Lead Plaintiffs filed a consolidated amended Complaint on June 21. On September 6, Lead Plaintiffs filed a consolidated second amended Complaint. Defendants filed a Motion to Dismiss the consolidated second amended Complaint on September 27. On January 3, 2020, the Court issued an Order granting Defendants' Motion to dismiss. Lead Plaintiffs filed a notice appealing the dismissal Order on January 31.