June 5, 2020 / 11:57 AM / a month ago

Investors sue Moscow Exchange over losses on oil futures trading halt

MOSCOW, June 5 (Reuters) - A group of 23 private investors have filed a lawsuit against the Moscow Exchange for around 40 million roubles over the bourse’s decision to suspend trading when crude oil futures turned negative in April, law firm Milton Legal said on Friday.

Market players lost almost 1 billion roubles ($14.53 million) when the Moscow Exchange halted trading of April futures on Light Sweet Crude Oil blend, which are pegged to U.S. West Texas Intermediate (WTI) crude futures, when WTI slid below zero for the first time ever on April 20.

In Moscow, trading was suspended with a minimum price of $8.84, while WTI futures went on to close at minus $37.63, leaving some investors deprived of the opportunity to limit their exposure.

Milton Legal said it had included the minimum number of plaintiffs in the initial filing, but has more than 100 in total.

A group of private investors previously asked the central bank in its role as regulator - and the MOEX’s major shareholder - to investigate whether the bourse had broken any rules.

The central bank last month said the Moscow Exchange had not violated regulations.

“Milton Legal believes the exchange certainly made a gross mistake in depriving investors of the opportunity to influence the trading process, and then calculating the expiry price at a negative price,” the law firm said in a statement.

MOEX did not warn participants of the possibility of negative prices, Milton Legal said, and left investors to shoulder losses, despite admitting that its systems were not fully capable of dealing with negative prices.

The bourse confirmed that it had received the suit and pointed to a decision taken on May 15 by the MOEX council, a body made up of representatives from leading Russian banks, brokerages and investment companies, which found that the exchange had acted in accordance with the rules and regulations.

$1 = 68.8100 roubles Writing by Alexander Marrow Editing by Katya Golubkova and Louise Heavens

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below