The Securities and Exchange Commission (SEC) on Monday announced settled charges against U.S. Oil Fund (USO) and its general partner U.S. Commodity Funds (USCF) regarding misleading statements. USCF additionally settled a parallel case with the Commodity Futures Trading Commission (CFTC) and will pay a total penalty of $2.5 million.

According to the SEC’s order, USO—an exchange-traded product (ETP)—received record investor inflows during April 2020, when the onset of lockdown measures as a result of the COVID-19 pandemic shook up the oil market. During the month, USO’s sole futures broker told the company it would not execute any new oil futures positions for USO.

“As a result of this limitation, USO was restricted from investing the proceeds generated by the future sale of newly created shares in oil future contracts, creating the risk that USO would not be able to meet its stated investment objective,” the SEC explained. The company allegedly did not fully disclose the character and nature of the limitation until one month after it was first imposed.

“As a result, USO’s investors failed to receive material information to inform their investment decisions,” the SEC stated.

The CFTC reiterated this concern in its order. “This failure to disclose material information to commodity pool participants operated as a fraud on those participants,” the agency stated.

The SEC’s order found USO and USCF violated a negligence-based anti-fraud provision of the federal securities laws. Without admitting or denying the agency’s findings, USO and USCF agreed to cease-and-desist orders. The $2.5 million penalty will be offset by up to $1.25 million paid in the CFTC’s parallel proceeding.

“ETP issuers must ensure that all of their disclosures are timely, complete, accurate, and in compliance with the federal securities laws,” said Osman Nawaz, acting chief of the SEC Enforcement Division’s Complex Financial Instruments Unit, in a press release. “We will continue to pursue violations involving ETPs, including those ETPs using futures-linked and other complex strategies and structures.”