BOSTON, July 28, 2020 (GLOBE NEWSWIRE) -- Block & Leviton LLP (www.blockleviton.com), a national securities litigation firm, announces that it has filed a class action lawsuit on behalf of shareholders against ProShares Ultra Bloomberg Crude Oil (NYSEArca: UCO) and certain of its executives for securities fraud.
The lawsuit was filed in the United States District Court for the Southern District of New York, located at 500 Pearl Street, New York, NY 10007. The case is captioned Di Scala v. ProShares Ultra Bloomberg Crude Oil, et al., No. 1:20-cv-05865 (S.D.N.Y.), and has not yet been assigned to a judge. The plaintiff is represented by Block & Leviton LLP, which has extensive experience in prosecuting investor class actions, including those involving financial fraud. Investors who purchased shares of UCO between March 6, 2020 and April 27, 2020 and who lost money are encouraged to contact the firm for a free case evaluation.
UCO is an exchange traded fund (“ETF”) purportedly designed to reflect the performance of crude oil as measured by the price of West Texas Intermediate (“WTI”) sweet, light crude oil futures contracts traded on the New York Mercantile Exchange. ETFs like UCO provide one of the primary means investors can gain exposure to fluctuations in oil prices. WTI is the main oil benchmark for North America, as it is sourced from the United States, primarily from the Permian Basin. The main delivery and price settlement point for WTI is Cushing, Oklahoma.
UCO stated that it would achieve its investment objective by seeking daily investment results, before fees and expenses, that correspond to two times the performance of its benchmark for a single day, and not for any other period. UCO stated that it would not seek to achieve its stated objective over a period greater than a single day.
However, unbeknownst to investors, extraordinary market conditions in early 2020 made UCO’s purported investment objective and strategy unfeasible. Oil demand fell precipitously as governments imposed lockdowns and businesses halted operations in response to the COVID-19 pandemic. Moreover, in early March 2020, Saudi Arabia and Russia launched an oil price war, increasing production and slashing export prices in a bid to increase the global market share of their domestic petrochemical enterprises. As excess oil supply increased and oil prices waned, the facilities available for storage in Cushing, Oklahoma approached capacity, ultimately causing a rare market dynamic known as “super contango,” in which the futures prices for oil substantially exceed the spot price. At the same time, retail investors began pouring hundreds of millions of dollars into UCO in an attempt to “buy the dip,” believing (correctly) that the price of oil would rebound as economies exited lockdown periods and the Russia/Saudi oil price war ended. Because of the nature of UCO’s investment strategy, these converging factors caused UCO to suffer exceptional losses and undermined UCO’s ability to meet its ostensible investment objective.
UCO quickly deteriorated, as a result of the nature and extent of Defendants’ fraud being revealed to investors and the market. Moreover, on April 21, 2020, UCO held a 1:25 reverse split for its shares. Ultimately, UCO suffered billions of dollars in losses and was forced to abandon its investment strategy. Through a series of rapid-fire investment overhauls, UCO was forced to transform from the passive ETF into an actively-managed fund struggling to avoid a total implosion. In April and May 2020, Defendants belatedly acknowledged the extreme threats and adverse impacts UCO had been experiencing at the time of the March offering, but which they failed to disclose to investors in a timely manner.
If you purchased or acquired shares of UCO and have questions about your legal rights or possess information relevant to this matter, please contact Block & Leviton attorneys at (617) 398-5600, via email at cases@blockleviton.com, or at https://www.blockleviton.com/cases/uco. UCO investors who purchased or otherwise acquired shares of UCO may, no later than September 28, 2020, seek to be appointed as a lead plaintiff representative of the Class.
Block & Leviton LLP is a firm dedicated to representing investors and maintaining the integrity of the country’s financial markets. The firm represents many of the nation’s largest institutional investors as well as individual investors in securities litigation throughout the United States. The firm’s lawyers have recovered billions of dollars for its clients.
This notice may constitute attorney advertising.
CONTACT:
BLOCK & LEVITON LLP
260 Franklin St., Suite 1860
Boston, MA 02110
Phone: (617) 398-5600
Email: cases@blockleviton.com
SOURCE: Block & Leviton LLP
www.blockleviton.com
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LAWSUIT FILED: Block & Leviton LLP Has Filed a Securities Fraud Lawsuit Involving ProShares Ultra Bloomberg Crude Oil (UCO); Investors Who Lost Money Should Contact the Firm - GlobeNewswire
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