Credit Suisse VelocityShares Daily Inverse VIX Short Term ETNs (NASDAQ: XIV)
On March 12, 2018, an analyst reported Credit Suisse knowingly did not perform duties recited in its January 29, 2018 VelocityShares Pricing Supplement.
The analyst reported “Credit Suisse represented in the Pricing Supplement that it would publish an estimate of the current economic value of XIV every 15 seconds based on real time VIX futures prices but, in fact, did not.”
More specifically, on February 5, 2018 “Credit Suisse effectively stopped updating its estimate of the current economic value of XIV shares at 4:10 pm when VIX futures prices were changing significantly” and “investors continued to buy XIV between 4:15 pm and 5:08 pm . . . when Credit Suisse was representing to the public that the economic value of the notes was $24.6961 but had to know that the true economic value was already between $4.22 and $4.40.”
“XIV investors have suffered enormous losses,” said Hagens Berman partner Reed Kathrein. “We’re focused on representations in Defendants’ Pricing Supplement and their possibly self-interested trading.”
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