One of China’s big state-owned banks has called for US exchange operator CME Group to look into price fluctuations that led to huge losses for investors in its crude oil futures product.
Bank of China (BOC) has announced that it has enlisted lawyers to send a letter to CME Group, calling for it to look into the causes for “abnormal fluctuations” in prices for crude oil futures on 21 April.
Hundreds of BOC’s retail investors lost around 600 million yuan (approx. $85 million) after placing bets on West Texas Intermediate via its Crude Oil Treasure instrument, just prior to the commodity’s plunge into negative territory on 20 April.
BOC’s “Crude Oil Treasure” product enabled China’s domestic investors to tap West Texas Intermediate oil futures without the need to launch an offshore account. The product did not permit leverage and required 100% margin.
The losses have reportedly prompted up to 1000 burnt BOC customers to seek legal advice in relation to pursuing a class action against the big state-owned bank, for full recovery of principal due to invalidity of contract.
In a statement issued by BOC on 29 April it said that it was still negotiating with investors, and would bear its responsibilities in accordance with the existing legal framework.