Securities Investigation, United State Oil Fund (USO)

USO Fund Alters Structure after dropping 30%

Are you concerned about your investment with the United State Oil Fund (USO)? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Arbitration claim.

The United States Oil Fund (USO), a popular exchange-traded security, reportedly declined more than 30% yesterday as the fund’s managers worked to change the fund’s structure in an attempt to put a stop to additional losses. The fund reportedly seeks to track the price of oil.

The latest change to USO’s terms came on Tuesday afternoon when the fund said it would invest in varying oil futures contracts. According to a regulatory filing, USO has already moved money into the oil contract for August delivery.

According to reports, the fund’s original structure called for it to buy futures in the nearest monthly contract, rolling to the next month’s contract two weeks before expiration. But amid the crisis in the oil market, which has seen prices drop to an all-time low, the fund was forced to change its structure in an effort to control losses. The first changes were made on Friday.

USO was reportedly able to stave off additional losses, ending the day roughly 25% lower at $2.80.

In addition to shifting which contracts the fund can hold, the manager of the fund, is reportedly temporarily suspending the issuance of “creation baskets.” Creation baskets are how an ETF creates new shares to meet demand. The baskets hold the underlying securities, which in this case are plummeting oil futures. With the suspension of these creation baskets, the ETF will essentially now trade with a fixed number of shares like a closed-end mutual fund, according to reports.

Investigating Potential Securities Claims

The White Law Group is investigating potential securities claims involving broker dealers who may have improperly recommended high risk oil and gas investments to its clients.

Prior to making recommendations to an individual investor, brokerage firms are required to disclose all the risks of an investment. Recommendations should only be made if the investment is suitable for an individual investor given their age, investment objections, investment experience and risk tolerance.

Brokerage firms that do not perform adequate due diligence on an investment and/or make unsuitable recommendations can be held accountable for investment losses through FINRA arbitration.

If you are concerned about your investment with the United State Oil Fund (USO) , The White Law Group may be able to help. Please call the offices at 888-637-5510 for a free consultation with a securities attorney.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Franklin, Tennessee.

For more information on The White Law Group and its representation of investors in FINRA arbitration claims, please visit http://whitesecuritieslaw.com.