E*Trade Hit With Lawsuit After Investors Burned by Subzero Oil

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.

Earlier this year, oil prices plummeted below zero for the ...