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Rating:SEC and CFTC Jointly Smite a Cali ETF Shop Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, November 8, 2021

SEC and CFTC Jointly Smite a Cali ETF Shop

Reported by Neil Anderson, Managing Editor

Two federal regulators have jointly smote a Bay Area ETF firm, to the tune of $2.5 million in penalties.

John Parish Love
President, CEO
Today, Osman Nawaz, acting chief of the complex financial instruments unit of the U.S. Securities and Exchange Commission's (SEC's) enforcement division, and Vincent McGonagle, acting director of enforcement for the U.S. Commodity Futures Trading Commission (CFTC), confirm that they have charged United States Commodity Funds LLC (USCF [profile]) and USCF's United States Oil Fund (USO) for not fully disclosing the ETP's changing circumstances during a volatile period last year in the oil markets. USCF and USO agreed to a pair of cease-and-desist orders, without admitting to or denying the findings. The penalties in the parallel cases partially offset each other.

The regulators' concerns stemmed from a time back in April 2020 when the futures broker for USO said it wouldn't execute any new oil futures positions for the fund. According to the SEC and the CFTC, the USCF team took a month to adequately disclose that limitation to investors. That violated a negligence-based anti-fraud rule, per the SEC.

Walnut Creek, California-based USCF lays claim to USO (launched in 2006) being the very first oil ETP. The firm offers a variety of commodity and equity ETFs and ETPs. 

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