U.S. Oil Fund Faces Merged Suits Over Covid-19, Price War Risks

Nutit A.S. suffered the largest alleged losses and will be the lead plaintiff in consolidated class complaints alleging United States Oil Fund LP kept important Covid-19 and price war information from investors, a New York federal court ruled.

Nutit, Heritage Investment Corp., and other shareholders allege U.S. Oil failed to disclose alleged risks to the fund when it submitted statements to the Securities and Exchange Commission in February and March.

Omitted risks include those related to the global pandemic and an oil price war between Russia and Saudi Arabia that began in March, according to the complaints.

None of the parties opposed consolidating the cases. However, Heritage argued it and not Nutit should lead the litigation because Heritage actually suffered more in losses based on a shorter proposed class period from March 19, 2020, to April 28, 2020.

But courts generally apply the longer class period in disputes over lead plaintiff, according to the U.S. District Court for the Southern District of New York.

Here, the longer class period, starting Feb. 25, is plausible because the World Health Organization declared the pandemic a global public health emergency in January, the court said Wednesday.

Nutit allegedly suffered $13.5 million in losses based on the longer period, compared to Heritage’s alleged $6.2 million in losses, the court said.

The court also approved Nutit’s selection of Robbins Geller Rudman & Dowd LLP as class counsel, citing its own previous findings that the firm is “competent and experienced” in securities class actions.

Judge Paul G. Gardephe issued the opinion.

Labaton & Sucharow LLP represented Heritage.

Ropes & Gray LLP represented U.S. Oil.

The case is Lucas v. U.S. Oil Fund, S.D.N.Y., No. 20 Civ. 4740 (PGG), 9/16/20.