United States Oil Fund Lawsuit: Class Action, SEC Settlement

The United States Oil Fund lawsuit filed by investors in 2020 was dismissed on September 29, 2025, when a federal judge in Manhattan ruled that USO’s disclosures during the April 2020 oil crash were adequate as a matter of law. A related shareholder derivative case is still on the docket, and separately, USO and its manager paid a $2.5 million penalty in November 2021 to settle SEC and CFTC charges over a narrower disclosure failure.

What Triggered the Lawsuits

On April 20, 2020, the West Texas Intermediate crude oil futures contract for May delivery settled at negative $37 per barrel, the first time the North American benchmark had ever gone below zero. The collapse followed a pandemic-driven demand crash, the Saudi–Russia price war, and physical storage capacity running out at Cushing, Oklahoma.¹

USO had drawn heavy retail buying from investors betting on a rebound. Fund assets hit an all-time high of more than $5 billion the week of April 13, with analysts noting many buyers did not understand the difference between owning futures contracts and owning physical oil. Shares fell 25% on April 21, closing at $2.80.²

USO’s manager, United States Commodity Funds LLC (USCF), scrambled to keep the fund functional. Between April 16 and April 27, it repeatedly reallocated the portfolio away from near-month WTI futures into longer-dated contracts, ending with holdings spread across second- through sixth-month contracts plus June 2021 futures.³ USCF also suspended new share creations on April 21, causing USO to trade more like a closed-end fund,⁴ and CME Group ordered the fund to limit its futures positions.⁵ On April 28, USO executed a 1-for-8 reverse share split.⁶

The Investor Class Action

Investor Robert Lucas filed the first complaint on June 19, 2020, in the U.S. District Court for the Southern District of New York, naming USO, USCF, USCF president and CEO John P. Love, and USCF CFO Stuart P. Crumbaugh.⁷ The case, Lucas v. United States Oil Fund, LP (Case No. 1:20-cv-04740), went to Judge Paul G. Gardephe. Multiple related suits were consolidated, and Judge Gardephe appointed Nutit A.S., a Czech joint stock company with losses exceeding $13.5 million, as lead plaintiff. Robbins Geller Rudman & Dowd LLP and Bronstein Gewirtz & Grossman LLC served as lead counsel.⁸

The complaint alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. During the class period of March 19 through April 28, 2020, the plaintiffs said, the defendants knew the fund’s passive strategy had broken down under the combined pressure of the demand collapse, the price war, and a rare “super contango” in which longer-dated futures traded at steep premiums to spot prices. Yet the fund continued selling shares, over $2.4 billion in March 2020 and $3.9 billion in April 2020, without disclosing that it could no longer track spot oil prices as promised. The complaint said the offerings raised management fees for the defendants while investors bought at inflated prices.⁷

The Dismissal

Judge Gardephe dismissed the consolidated class action on September 29, 2025. He found that USO’s “extensive disclosures — including real-time updates during the 2020 market meltdown — made clear to investors the relevant fund features and risks,” and that the plaintiffs “failed as a matter of law to allege any misleading statements or omissions.”⁹ No appeal to the Second Circuit has been publicly documented in available records as of mid-2026.

The Shareholder Derivative Case

A separate track is still open. Investor Michael Cantrell filed a shareholder derivative suit on behalf of USO against USCF and several officers and board members, including Love, Crumbaugh, Gordon L. Ellis, Malcolm R. Fobes III, Nicholas D. Gerber, Andrew F. Ngim, Robert L. Nguyen, and Peter M. Robinson. The consolidated case, In re United States Oil Fund, LP Derivative Litigation (Case No. 1:20-cv-06974), was also assigned to Judge Gardephe.¹⁰

The court stayed the derivative proceedings on November 13, 2020, pending resolution of the motions to dismiss in the securities case.¹⁰ With the class action now dismissed, the path forward is uncertain. Docket activity continued through at least May 2026, and the case remains pending.

The SEC and CFTC Settlement

The regulators filed and settled parallel actions on November 8, 2021.¹¹¹² Their theory was narrower than the class action’s. After the April 2020 turmoil, USO’s sole futures commission merchant told the fund it would not execute any new oil futures positions, meaning USO could not invest the proceeds of newly issued shares into futures. The SEC found that USO and USCF failed to disclose the full nature of that restriction for roughly a month, from late April through mid-June 2020.¹³

The SEC charged violations of Section 17(a)(3) of the Securities Act of 1933, a negligence-based anti-fraud provision.¹³ The CFTC found violations of the Commodity Exchange Act and CFTC regulations, calling the omission a “fraud on those participants.”¹² Without admitting or denying the findings, USO and USCF agreed to cease-and-desist orders and a combined $2.5 million civil penalty across both proceedings, with up to $1.25 million of the SEC penalty offset by the CFTC payment.¹¹ The order also barred USO and USCF from using the penalty to reduce any future compensatory damages awarded in related investor lawsuits.

Where USO Stands Now

USO continues to operate. It trades on NYSE Arca under the ticker USO with total net assets of about $1.88 billion and roughly 16.3 million shares outstanding as of mid-2026. Net asset value was roughly $115 per share.¹⁴ USCF is still the general partner, and after a transition period that ended in January 2024, the fund returned to a strategy centered on its benchmark oil futures contract, while keeping the flexibility to hold other oil-related instruments.¹⁵

1
Wharton School of Finance. Nick Roussanov Research Paper
2
CNBC. USO Benchmark Is the Near-Month Crude Oil Futures Contract
3
Robbins Geller Rudman & Dowd. USO Complaint
4
Forbes. A Plummeting Share Price and Upcoming Reverse Split Show That USO Has Outlived Its Usefulness
5
Crain’s Chicago Business. US Oil Fund Says CME Ordered It to Limit Futures Positions
6
U.S. Securities and Exchange Commission. USO 10-Q Filing, March 31, 2020
7
American Bar Association. Robert Lucas v. United States Oil Fund
8
Law360. Robbins Geller to Lead Investor Suit Against US Oil Fund
9
Ropes & Gray. Ropes & Gray Litigation Team Wins Dismissal of Securities Class Action for Leading Oil ETF
10
CourtListener. In re United States Oil Fund, LP Derivative Litigation
11
U.S. Securities and Exchange Commission. SEC Charges United States Oil Fund and Its General Partner
12
U.S. Commodity Futures Trading Commission. CFTC Orders United States Commodity Funds and United States Oil Fund to Pay $2.5 Million
13
U.S. Securities and Exchange Commission. SEC Administrative Order 33-11006
14
USCF Investments. United States Oil Fund
15
U.S. Securities and Exchange Commission. USO 10-Q Filing, September 30, 2025