SEC Charges Exchange-Traded Product and Its General Partner With Disclosure Failures

The Securities and Exchange Commission today charged United States Oil Fund LP, an exchange-traded product (ETP), and its general partner United States Commodity Funds LLC for misleading statements about limitations imposed by its sole futures commission merchant and broker. USO and USCF have agreed to pay $2.5 million in penalties to settle parallel cases by the SEC and Commodity Futures Trading Commission According to the SEC’s order, USO’s investment objective is to track the changes in the spot price of oil, as measured by the changes in prices of certain oil futures contracts. In April 2020, in the midst of oil market turmoil and the near-month futures contract closing at a negative price, USO’s sole futures broker told USO it would not execute any new oil futures positions for USO.