LEGAL PROCEEDINGS ETFMG
The Trust, the Adviser, and certain officers and affiliated persons of the Adviser (together with the Adviser, the “Adviser Defendants”) were named as defendants in an action filed December 21, 2021, in the Superior Court of New Jersey, Union County, captioned PureShares, LLC, d/b/a PureFunds et al. v. ETF Managers Group, LLC et al., Docket No. UNN-C-152-21 (the “NJ Action”). The NJ Action asserted breach of contract and other tort claims and sought damages in unspecified amounts and injunctive relief. On May 25, 2022, the court in the NJ Action dismissed with prejudice all claims asserted against the Trust, as well as all contract claims and all except one tort claim asserted against the Adviser Defendants.
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of ETF Managers Trust
and the Shareholders of ETFMG Prime Junior Silver ETF, ETFMG ISE Cyber Security ETF, ETFMG ISE Mobile Payments ETF, Wedbush ETFMG Global Cloud Technology ETF, Wedbush ETFMG Video Game Tech ETF, ETFMG Alternative Harvest ETF, BlueStar Israel Technology ETF, Etho Climate Leadership U.S. ETF, AI Powered Equity ETF, ETFMG Sit Ultra Short ETF, ETFMG Treatments, Testing and Advancements ETF, ETFMG Travel Tech ETF, ETFMG U.S. Alternative Harvest ETF, ETFMG 2x Daily Alternative Harvest ETF, ETFMG Prime 2x Daily Junior Silver Miners ETF, ETFMG 2x Daily Travel Tech ETF, ETFMG 2x Daily Inverse Alternative Harvest ETFF:
In planning and performing our audit of the financial statements of ETF Managers Trust (the “Trust”), which includes ETFMG Prime Junior Silver ETF, ETFMG ISE Cyber Security ETF, ETFMG ISE Mobile Payments ETF, Wedbush ETFMG Global Cloud Technology ETF, Wedbush ETFMG Video Game Tech ETF, ETFMG Alternative Harvest ETF, BlueStar Israel Technology ETF, Etho Climate Leadership U.S. ETF, AI Powered Equity ETF, ETFMG Sit Ultra Short ETF, ETFMG Treatments, Testing and Advancements ETF, ETFMG Travel Tech ETF, ETFMG U.S. Alternative Harvest ETF, ETFMG 2x Daily Alternative Harvest ETF, ETFMG Prime 2x Daily Junior Silver Miners ETF, ETFMG 2x Daily Travel Tech ETF, ETFMG 2x Daily Inverse Alternative Harvest ETF (collectively, the “Funds”) as of and for the year ended September 30, 2022 in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), we considered the Funds’ internal control over financial reporting, including controls over safeguarding securities, as a basis for designing our auditing procedures for the purpose of expressing our opinion on the Funds’ financial statements and to comply with the requirements of Form N-CEN, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Management of the Funds is responsible for establishing and maintaining effective internal control over financial reporting. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (GAAP). A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Funds; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Funds are being made only in accordance with authorizations of management and directors of the Funds; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of a company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Funds’ annual or interim financial statements will not be prevented or detected on a timely basis.
Our consideration of the Funds’ internal control over financial reporting was for the limited purpose described in the first paragraph and would not necessarily disclose all deficiencies in internal control that might be material weaknesses under standards established by the PCAOB. However, we noted no deficiencies in the Funds’ internal control over financial reporting and its operation, including controls over safeguarding securities, that we consider to be a material weakness as defined above as of September 30, 2022.
This report is intended solely for the information and use of management and the Board of Trustees of ETF Managers Trust and the Securities and Exchange Commission and is not intended to be and should not be used by anyone other than these specified parties.
/s/ WithumSmith+Brown, PC
New York, NY
November 29, 2022