According to the Complaint, the United States Oil Fund, LP ("USO") is an exchange traded fund purportedly designed to track the daily changes in percentage terms of the spot price of West Texas Intermediate (“WTI”) light, sweet crude oil delivered to Cushing, Oklahoma. Because retail investors are generally not equipped to buy and sell barrels of oil or authorized to trade oil futures, ETFs such as USO provide one of the primary means that such investors can gain exposure to fluctuations in oil prices.
The Class Period begins on March 19, 2020. On that day, Defendants filed with the SEC the Registration Statement on Form S-3 to register USO shares for the Offering, which, after amendment, was declared effective March 23, 2020. The Complaint alleges that numerous representations to investors in the Registration Statement were materially false and misleading when made and that the Registration Statement also failed to provide any specifics regarding the effects of the COVID-19 pandemic, instead merely listing “pandemics such as COVID-19” among a laundry list of general market “events or conditions” that “may adversely impact the demand for crude oil.”
The Complaint alleges that during the Class Period, Defendants disseminated or approved false or misleading statements and failed to disclose adverse facts known to them about USO. The Complaint further alleges that Defendants’ fraudulent scheme and course of business: (i) deceived the investing public regarding USO’s business, prospects and risks; (ii) artificially inflated the prices of USO securities; and (iii) caused plaintiff and other members of the Class to purchase USO securities at artificially inflated prices.
On September 16, 2020, the Court issued an Order consolidating cases and appointing Lead Plaintiff and Counsel. Lead Plaintiff filed a consolidated amended Complaint on November 30.