Sadis & Goldberg announced that it has been retained by a hedge fund to investigate Interactive Brokers for allegedly causing clients severe losses by allegedly preventing them from selling WTI Futures contracts when oil prices went negative on April 20.
A spokesperson for Interactive Brokers declined to comment on the possible investigation.
Sadis cited that the price of May 2020 WTI futures contracts plunged from a price of more than $5 per barrel to minus $37.63 per barrel on April 20. The law firm alleges that the trading system had a defect that prevented clients from selling any WTI Futures at negative prices, which caused clients to more than $100 million in losses.
Interactive Brokers, according to Sadis, has publicly admitted that the failure of the IB trading system to allow clients to sell at negative prices, but to date has refused to repay a number of clients who have suffered losses.
The New York-based law firm cites press reports that said the trading system also had other problems that day including to fail to provide accurate prices when the WTI Futures prices turned negative and therefore incorrectly calculated client margin levels.
