The U.S. Oil Fund Is Put on Notice by the SEC
The Securities and Exchange Commission (SEC) sent a Wells notice to the U.S. Oil Fund ETF (NYSEMKT: USO), which is a letter it sends to people or companies when it plans to bring an enforcement action against them. In this case, the SEC staff has made a preliminary determination that the regulator should file an enforcement action against the oil ETF and its CEO, John Love.
The issue driving the possible enforcement action is the fund's disclosures in late April and early May on the constraints it faced with investing in oil futures contracts during the oil price collapse earlier this year. At the time, the ETF said that it might not meet its investment objective of matching the price movements of WTI (the primary U.S. oil price benchmark) because it traded in negative territory. That collapse caused the fund to issue all its registered shares, impacting its ability to create new ones. Because of that, there was a substantial difference between the fund's trading price and WTI futures contracts.
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Source Fool.com
