Less than a fortnight after it became clear that Jun Zhang, a client of online trading company GAIN Capital, would appeal from a dismissal of his case at the New Jersey District Court, the trader appears to have abandoned his plans. This becomes clear from a document filed with the United States Court of Appeals for the Third Circuit on July 6, 2021.

The document, seen by FX News Group, states that Zhang moves the Court for voluntary Dismissal without costs of the case.

The parties have met and conferred regarding the motion and Counsel for Defendant and Appellee GAIN Capital has said that Gain Capital does not oppose Zhang’s motion for voluntary dismissal without costs.

No more details about this turn of events have been provided.

Let’s recall that the plaintiff is a self-directed trader who has been using the GAIN Trader platform to trade derivatives of commodity futures since 2017. Zhang alleges this action arose from the negative pricing of WTI futures.

On April 3, 2020, the CME Group announced to its CME Globex and Market Data customers that effective April 5, 2020, futures and options including crude oil “will be flagged as eligible to trade at negative prices.” On April 8, 2020, CME Group published an advisory notice which stated, in relevant part, that if major energy prices continued to fall towards zero in the following months, CME Clearing had a tested plan to support the possibility of negative options and enable markets to continue to function normally. The notice specifically mentioned WTI Crude Oil futures, RBOB Gasoline futures, and Heating Oil futures for possible negative pricing.

On April 15, 2020, CME Group sent a memorandum to all clearing member firms under the subject “Testing opportunities in CME’s ‘News Release’ environment for negative prices and strikes for certain NYMEX energy contracts.” The memorandum stated, “Support for zero or negative futures and/or strike prices is standard throughout CME systems.” It also stated, “Effective immediately, firms wishing to test such negative futures and/or strike prices in their systems may utilize CME’s ‘News Release’ testing environments.”

On April 20, 2020, the day the WTI May 2020 contracts were set to expire, their prices dropped into the negatives, reaching -$40.32 per barrel at its lowest point, and closing at -$37.63 per barrel. However, GAIN’s US_OIL contract pricing remained in the positives, with the lowest price shown as $0.01 per barrel and the closing price at $0.05 per barrel.

On the same day, approximately twenty-two minutes before the closing of U.S. crude oil trading, GAIN’s US_OIL trading halted, “thus dissociating the derivative from its underlying WTI future contracts.” On April 21, 2020, GAIN’s platform showed the settlement pricing of US_OIL for the May contracts as $0.01.

On April 23, 2020, Zhang received an email from GAIN announcing that Zhang’s US_OIL account had been assessed an “adjustment” of -$143,032.00 due to the negative pricing of WTI’s May 2020 contract and that GAIN had withdrawn that adjustment amount from the plaintiff’s Trust Account.

After inquiring about the adjustment with GAIN’s customer service, the trader was told the adjustment was a decision made by GAIN’s trading platform management.

On July 24, 2020, the plaintiff filed a three-count putative class action Complaint alleging breach of fiduciary duty (Count I); negligence (Count II); and consumer fraud (Count III).

On October 2, 2020, GCH filed two Motions: (1) a Motion to Dismiss pursuant to the doctrine of forum non conveniens; and (2) a Motion to Dismiss for failure to state a claim.

In his opinion issued on May 25, 2021, the Judge sided with GAIN noting that a few public interest factors support dismissal. First, New Jersey does not have a “local interest” in deciding a “localized controversy” at home, since the plaintiff is a Chinese resident that contracted with a Cayman Islands business regulated by the Cayman Islands Monetary Authority.

And second, since Cayman law applies to the claims in this action, “having a trial of a diversity case in a forum that is at home with the law that must govern” also favors the Cayman Islands in this diversity action. Therefore, the plaintiff has not carried his burden under either prong of the forum non conveniens inquiry.

Because the plaintiff has not carried his burden, the Court dismissed the action for forum non conveniens.