E*Trade Hit With Lawsuit After Investors Burned by Subzero Oil
- Plaintiffs allege glitch prohibited sales as oil fell to $0
- U.S. regulators have started investigations into various firms
Photographer: Justin Sullivan/Getty Images
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One of the biggest U.S. brokerages has been hit with a class action lawsuit after the oil price crash in April led to hundreds of thousands of dollars in losses for its clients and allegations that the firm failed to adequately warn investors of risks.
The lawsuit, filed Tuesday in the Northern District Court of California, alleges that E*Trade Securities did not properly test its online trading platform for the possibility of negative oil futures in advance while also failing to disclose that prices could fall below the $0 mark.