Earlier this month, a New York judge dismissed an investor class action lawsuit alleging that ProShares Advisors LLC and SEI Investments Distribution Co failed to fully disclose the risks of investing in leveraged exchange traded funds ("ETFs") such as the ProShares SRS Fund. In dismissing the action, U.S. District Court Judge John G. Koeltl wrote that ProShares' sales materials adequately disclosed the risks involved. The court's ruling shows how tough it can be for aggrieved investors to directly sue fund companies for misleading marketing.
The message for do-it-yourself investors is caveat emptor (buyer beware). However, investors who purchased leveraged or inverse ETFs through a financial advisor may want to consider pursuing a securities arbitration claim. See related blog post: Securities Arbitration vs. Class Actions: Which is More Financially Rewarding? Our securities law firm has helped several investors recover losses from financial advisors that inappropriately recommendeded leveraged and inverse ETFs such as those offered by ProShares and Direxion. Please read the blog postings below for more information.
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