USO (United States Oil Fund) ETF class action

[abt123]

What is the name of your state? Texas

What happened regarding the USO class action that was filed against the USO oil fund ETF when the oil market crashed in 2020 and because of what USO did to their fund as a reaction to the crash the fund didn’t rebound as well when the oil market rebounded? I tried searching Google for this class action and can’t find where the case is being tried, case number, status of the case, if it’s still active, etc.

 

[PayrollHRGuy]

https://www.google.com/search?q=united+states+oil+fund+class+action+lawsuit&sxsrf=AOaemvJk7HNFFx_yP5nAhW2iVdbyTCw0UQ:1639768542850&ei=3uG8Yd7_MpiyqtsPy_2K2AI&oq=United+States+Oil+Fund+Class&gs_lcp=Cgdnd3Mtd2l6EAMYATIGCAAQFhAeMgYIABAWEB46BwgAEEcQsAM6BwgAELADEEM6CAgAEOQCELADOhAILhDHARCjAhDIAxCwAxBDOgQIABBDOgUIABCABDoFCAAQhgNKBAhBGABKBAhGGAFQ-QxY3xpg1yVoAXACeACAAWCIAYEEkgEBNpgBAKABAcgBEsABAQ&sclient=gws-wiz

 

[zddoodah]

What happened regarding the USO class action that was filed against the USO oil fund ETF when the oil market crashed in 2020 and because of what USO did to their fund as a reaction to the crash the fund didn’t rebound as well when the oil market rebounded?

Ummm...Google is your friend. According to a google search I did using the bolded language from your post, which I cut and pasted into Google, there was or may be or may have been regulatory action by the SEC. I also found a reference (fourth search result) to a class action suit filed in the U.S. District Court for the Southern District of New York.

I tried searching Google for this class action and can’t find where the case is being tried, case number, status of the case, if it’s still active, etc.

Well...what search term(s) did you use? As noted, I found it in about 5 seconds using language from your own post.

 

[abt123]

Yes, I used the same search terms but all I found is that there was a class action filed. I couldn’t find and still can’t find a link to the class action and the status of it. I’m looking for the page where it’ll show what’s going on with it. The information you all provided doesn’t really add anyting to what I already found. I found one lawsuit here but looks like it might have been dismissed: https://www.courtlistener.com/docket/17407335/parties/in-re-united-states-oil-fund-lp-securities-litigation/ Was that the main litigation? My guess is not. It was a big case with many law firms invovled, so am interested to what happened to the main case.

 

[zddoodah]

I used the same search terms but all I found is that there was a class action filed. I couldn’t find and still can’t find a link to the class action and the status of it.

Cases don't have links. Since the case is filed with a federal court, you can get some information through a service called PACER (www.pacer.com). It may be that, at some point, a website will be created, but that doesn't happen for every case. For all I know, the court hasn't even certified the class yet. If you think you're a member or potential member of the plaintiff class, you can contact the plaintiff's attorneys.

The information you all provided doesn’t really add anyting to what I already found.

Well...in your original post, you wrote, "I tried searching Google for this class action and can’t find where the case is being tried [or the] case number." The link I provided contained search results that included both of those pieces of information. Of course, now you've contradicted yourself by saying you already had that info and have provided a link yourself that indicates the court where the case was filed and the case number.

I found one lawsuit here but looks like it might have been dismissed

Doesn't look like that to me. What makes you think that?

Was that the main litigation?

I don't understand the question.

It was a big case with many law firms invovled, so am interested to what happened to the main case.

The representative plaintiff's two lawyers (with the same firm) are identified in the link you provided, along with their phone numbers. Call them and see if you can get your questions answered.

 

[abt123]

Cases don't have links. Since the case is filed with a federal court, you can get some information through a service called PACER (www.pacer.com). It may be that, at some point, a website will be created, but that doesn't happen for every case. For all I know, the court hasn't even certified the class yet. If you think you're a member or potential member of the plaintiff class, you can contact the plaintiff's attorneys.



Well...in your original post, you wrote, "I tried searching Google for this class action and can’t find where the case is being tried [or the] case number." The link I provided contained search results that included both of those pieces of information. Of course, now you've contradicted yourself by saying you already had that info and have provided a link yourself that indicates the court where the case was filed and the case number.



Doesn't look like that to me. What makes you think that?



I don't understand the question.



The representative plaintiff's two lawyers (with the same firm) are identified in the link you provided, along with their phone numbers. Call them and see if you can get your questions answered.

I don’t believe I contradicted myself like you claim. At best there’s some misunderstanding/miscommunication. I assure you this is no trick or lie here that I’m doing that you have somehow caught me contradicting myself. I’m no expert in this obviously and am trying to figure it out. As I understand the USO actions weren’t just one law firm but several. I tried contacting them and didn’t really get much of a response. Yes, I think I’m a member of the class, but the law firms were looking for people with higher amounts of damages to be part of the class representatives, or by the time I found out about it it the deadline for that had passed. Generally the law firms weren’t helpful it seems in communication with people when they find out aren’t going to be much use to them. So I’m just trying to figure out where the main case is being tried and want to keep up to date with it and also make sure I don’t miss the settlement if there is one, as for example I had a change of address, not sure if I’ll be properly notified. You claim the link you provided has the information I need, but I still don’t have that information, and again, if the links you provided contain that information I certainly haven’t been able to figure it out. I would appreciate if you can tell me the information if you happen to know. Otherwise thanks anyways for your time. From my limited knowledge with civil cases, there is often indeed “links” to a case, both from apparently 3rd party case aggregators, and I’ve also seen them directly from the court website, where for example they’ll have various important filings regarding a case, and if I recall you can often even see a pdf of the filings. Indeed, the link I provided earlier from courtlistener website seems to have that info, and the last posting in it seems to mention something about a dismissal of that particular action, if I understood it correctly. Basically I’m trying to figure out what happened to the main class action, if there is such a thing, and to keep track of it.

 

[doucar]

Try www.pacer.com previously cited. That is the website for all federal cases filed in the United States.

 

[zddoodah]

I don’t believe I contradicted myself like you claim.

Whatever....

At the end of the day, I don't think anyone here is going to take the time to do any research beyond what I and others have already done, and I doubt anyone with personal knowledge regarding this case/these cases is going to happen upon this thread.

 

[quincy]

What is the name of your state? Texas

What happened regarding the USO class action that was filed against the USO oil fund ETF when the oil market crashed in 2020 and because of what USO did to their fund as a reaction to the crash the fund didn’t rebound as well when the oil market rebounded? I tried searching Google for this class action and can’t find where the case is being tried, case number, status of the case, if it’s still active, etc.

Do you have a personal stake in this, abt123, or are you just curious?

Last month (November), the United States Oil Fund (USO) agreed to settle the charges filed against it by the SEC for $2.5 million. See: https://www.sec.gov/litigation/admin/2021/33-11006.pdf

In addition to the 2020 investigation and charges by, and recent settlement with, the SEC, several different class action suits were also filed. At least one was still ongoing as of April 2021.

If you want information about a specific USO class action, you could always contact the law firms that handled or are handling them.

To start, you might want to search for:

Palacios v. United States Oil Fund, LP, No.20-cv-06442 (S.D.N.Y) and Lucas v. United States Oil Fund, LP, No.20-cv-470 (S.D.N.Y.). See: https://law.justia.com/cases/federal/district-courts/new-york/nysdce/1:2020cv06442/542138/22/

 

[abt123]

Thanks everyone for your replies. I signed up for the Pacer site and found some cases regarding it, though it’s not easy to make sense of it, but I’ll do more research into it and maybe contact the law firm(s) involved for a status update.

Do you have a personal stake in this, abt123, or are you just curious?

Last month (November), the United States Oil Fund (USO) agreed to settle the charges filed against it by the SEC for $2.5 million. See: https://www.sec.gov/litigation/admin/2021/33-11006.pdf

In addition to the 2020 investigation and charges by, and recent settlement with, the SEC, several different class action suits were also filed. At least one was still ongoing as of April 2021.

If you want information about a specific USO class action, you could always contact the law firms that handled or are handling them.

To start, you might want to search for:

Palacios v. United States Oil Fund, LP, No.20-cv-06442 (S.D.N.Y) and Lucas v. United States Oil Fund, LP, No.20-cv-470 (S.D.N.Y.). See: https://law.justia.com/cases/federal/district-courts/new-york/nysdce/1:2020cv06442/542138/22/

Thanks Quicy for your response. I do have a personal stake in it. At the start of the pandemic the oil prices came down alot and many investors started to buy oil, often through the USO ETF. But the oil market kept crashing and one of the main oil contracts even became negative. Many were not expecting that to happen, because a negative price seems counter intuitive and one would probably have to be a highly knowledgable investor to know that something like that was even possible. If I understand correctly, and this is only a layman understanding and I’m not familiar with the pleadings, when the oil market crashed to below zero, luckily the way the USO ETF was setup the negative oil price happened to not affect the fund as it had no exposure to those particular contracts if I understand. But if I understand the USO ETF, in an effort to protect themself from the potential of other contracts going to negative and possibly harming their fund, suddenly changed the way they bought oil contracts that protected their own fund at the cost to those investors who had bought in. In doing this the USO ETF sort of changed from and ETF that was supposed to follow the oil markets, to a fund that got involved in investment and trading activity of their own, for their own, and they chose wrong trading activity that mostly protected themselves and harmed their investors. Because of this, when the oil market rebounded and normally the ETF would have also rebounded and the investors would have recouped their losses and later would have made a very good profit, the USO ETF didn’t rebound because it didn’t properly follow the oil market because of how they tweaked things to protect themselves, and so many of those investors were still in the negative, while the USO fund organization didn’t suffer anything other than a bad reputation. And when the oil market rebounded even more and maybe the investments of investors would have doubled or something, those investors, if they were still holding, would have just barely made back their original investment. It became a very dramatic difference in price movements. I kept seeing the oil markets rise and rise by huge amounts while my USO ETF price just sat there in the negative. Anyways, it left a bad impression with many people I believe, but I’ll have to see what the legal system does regarding it. I’m not sure what the status of the case is but I did also notice that they recently reached a settlement with the SEC. Not sure if this will be a positive thing for the class action, if it’s still ongoing. Will do more research. Thanks again.

UPDATE: I may be wrong about what I said above regarding the USO effectively trading for their benefit. I read the SEC settlement website and it only mentioned that they were restricted by their broker to buy certain oil contracts and the issue was they failed to inform their investors, so I may have had some false information or assumptions. As mentioned, don’t know much about the details. Sorry for any misunderstanding.

 

[quincy]

Thanks everyone for your replies. I signed up for the Pacer site and found some cases regarding it, though it’s not easy to make sense of it, but I’ll do more research into it and maybe contact the law firm(s) involved for a status update.



Thanks Quicy for your response. I do have a personal stake in it. At the start of the pandemic the oil prices came down alot and many investors started to buy oil, often through the USO ETF. But the oil market kept crashing and one of the main oil contracts even became negative. Many were not expecting that to happen, because a negative price seems counter intuitive and one would probably have to be a highly knowledgable investor to know that something like that was even possible. If I understand correctly, and this is only a layman understanding and I’m not familiar with the pleadings, when the oil market crashed to below zero, luckily the way the USO ETF was setup the negative oil price happened to not affect the fund as it had no exposure to those particular contracts if I understand. But if I understand the USO ETF, in an effort to protect themself from the potential of other contracts going to negative and possibly harming their fund, suddenly changed the way they bought oil contracts that protected their own fund at the cost to those investors who had bought in. In doing this the USO ETF sort of changed from and ETF that was supposed to follow the oil markets, to a fund that got involved in investment and trading activity of their own, for their own, and they chose wrong trading activity that mostly protected themselves and harmed their investors. Because of this, when the oil market rebounded and normally the ETF would have also rebounded and the investors would have recouped their losses and later would have made a very good profit, the USO ETF didn’t rebound because it didn’t properly follow the oil market because of how they tweaked things to protect themselves, and so many of those investors were still in the negative, while the USO fund organization didn’t suffer anything other than a bad reputation. And when the oil market rebounded even more and maybe the investments of investors would have doubled or something, those investors, if they were still holding, would have just barely made back their original investment. It became a very dramatic difference in price movements. I kept seeing the oil markets rise and rise by huge amounts while my USO ETF price just sat there in the negative. Anyways, it left a bad impression with many people I believe, but I’ll have to see what the legal system does regarding it. I’m not sure what the status of the case is but I did also notice that they recently reached a settlement with the SEC. Not sure if this will be a positive thing for the class action, if it’s still ongoing. Will do more research. Thanks again.

The SEC would not have filed an action against the USO if it had not seen violations of federal securities law. The agreed upon settlement terms reached with the USO essentially were seen by the SEC as what it could expect to achieve if it had continued with litigation. It appears to provide appropriate relief with a return of lost money to the investors.

Whether a class action has reason to continue after the SEC settlement will depend on any individual harms suffered by the members of the class actions. One thing that the SEC settlement with USO does do is support the claims of the shareholders in their legal action. That can be seen as a positive. Speaking to your investment broker is one way to find out what you as an investor can hope to recover.

Good luck.

 

[abt123]

The SEC would not have filed an action against the USO if it had not seen violations of federal securities law. The agreed upon settlement terms reached with the USO essentially were seen by the SEC as what it could expect to achieve if it had continued with litigation. It appears to provide appropriate relief with a return of lost money to the investors.

Whether a class action has reason to continue after the SEC settlement will depend on any individual harms suffered by the members of the class actions. One thing that the SEC settlement with USO does do is support the claims of the shareholders in their legal action. That can be seen as a positive. Speaking to your investment broker is one way to find out what you as an investor can hope to recover.

Good luck.

I read the SEC website regarding the settlement and it seems I may be wrong about what I said earlier regarding the USO effectively trading for their own benefit. The SEC website only mentioned that they were restricted by their broker to buy certain oil contracts and the issue was they continuously failed to inform their investors about it, so I may have had some false information or assumptions. Sorry for any misunderstanding.

Yes, I do see that the SEC settlement does seem to support the investor claims and seems to be good news for the investors. My investment borker is Charles Schwab, which is just retail investing/trading in my case, so I don’t really have a person that advised me. Maybe I can still contact them and see if they have any info. I may even contact the USO ETF and update my address with them and ask if they have any update regarding the class action. That way if they have to pay a settlement they have my most updated contact info. Regarding your statement that the SEC settlement appears to provide appropriate relief with a return of lost money to the investors, where did you get that info? I looked at the settlement document here https://www.sec.gov/litigation/admin/2021/33-11006.pdf and didn’t notice anything like that.

 

[quincy]

I read the SEC website regarding the settlement and it seems I may be wrong about what I said earlier regarding the USO effectively trading for their own benefit. The SEC website only mentioned that they were restricted by their broker to buy certain oil contracts and the issue was they continuously failed to inform their investors about it, so I may have had some false information or assumptions. Sorry for any misunderstanding.

Yes, I do see that the SEC settlement does seem to support the investor claims and seems to be good news for the investors. My investment borker is Charles Schwab, which is just retail investing/trading in my case, so I don’t really have a person that advised me. Maybe I can still contact them and see if they have any info. I may even contact the USO ETF and update my address with them and ask if they have any update regarding the class action. That way if they have to pay a settlement they have my most updated contact info. Regarding your statement that the SEC settlement appears to provide appropriate relief with a return of lost money to the investors, where did you get that info? I looked at the settlement document here https://www.sec.gov/litigation/admin/2021/33-11006.pdf and didn’t notice anything like that.

I cannot remember which of the sites I visited that mentioned relief for investors who lost money on their investments. It was probably the SEC site - but perhaps it was from sites that offered analyses of the settlement. I bookmarked nothing.

You can contact one of the attorneys who has been involved with the litigation for a more complete picture of where you stand in regard to the settlement and to any class action suit still working its way through the courts.

Good luck.