MOSCOW, June 5 (RAPSI) – Investors affected by an unprecedented drop in WTI oil prices collectively sued the Moscow Exchange alleging an early close of trade at negative oil prices was unlawful, MILTON LEGAL partner Sergey Shakirov told RAPSI on Friday.
The lawsuit was initiated by 23 plaintiffs in the Presnensky District Court in Moscow, according to Shakirov. Other plaintiffs, he says, will join the move later. At the moment the claim seeks recovery of about 40 million rubles ($580,000 at the current exchange rate) as alleged damages.
Negative prices of WTI oil futures were registered on April 20 catching the exchange and brokers by surprise; the operations were stopped at $8.84 per barrel.
Traders had absolutely no opportunity to influence the deal, so the positions of investors were undermined as they could not dispose of their securities, the initiators of the lawsuit allege.
According to the lawyer, the Moscow Exchange software was not suited to trade at negative prices, whereas the Exchange management refused to nullify the results of the operations and compensate damages to its clients. The investors also insist that the defendant made certain mistakes as concerned to risk management, failed to change the parameters of the amounts of the initial margin, and refused to permit trade to be continued in spite of the fact that they had the respective technical means at their disposal.