On June 21, 2018, U.S. Magistrate Judge Sarah Netburn of the United States District Court for the Southern District of New York appointed Set Capital LLC, ACM Ltd., Stefan Jager, Nikolay Drozhzhinov, and Aleksandr Gamburg as Lead Plaintiffs in Chahal v. Credit Suisse Grp. AG, et al., a putative securities and investor class action lawsuit, and approved their selection of Cohen Milstein Sellers & Toll PLLC and Levi & Korsinsky, LLP as Co-Lead Counsel for the putative class. In doing so, Judge Netburn noted the financial experience and sophistication of the Lead Plaintiffs and the extensive experience representing classes in securities actions possessed by Co-Lead Counsel.

Case Background

On March 14, 2018, a putative securities and investor class lawsuit was filed on behalf of Rajan Chahal and other investors against Credit Suisse Group AG and certain of its senior executives in the United States District Court for the Southern District of New York. 

The Complaint alleges that Credit Suisse, a multinational investment bank based in Switzerland, as well as certain of its officers made materially false and misleading statements about the company’s VelocityShares Inverse VIX Short Term Exchange Traded Notes, commonly known as and trading under the name XIV.     

Specifically, the Complaint alleges that on January 29, 2018, Credit Suisse issued a registration statement that misrepresented the updating and accuracy of an important valuation metric of XIV known as the “Intraday Indicative Value” by failing to disclose that:  (i) contrary to Credit Suisse’s representations, the Intraday Indicative Value was not updated every 15 seconds based on real-time calculation of the relevant index applying the real-time prices of the relevant VIX futures contracts upon which the index was based; and (ii) the Intraday Indicative Value was not an accurate gauge of the economic value of XIV notes.

The Complaint further alleges that, on February 5, 2018, between 4:10 p.m. and 5:09 p.m., Credit Suisse incorrectly represented XIV’s Intraday Indicative Value to be between $24.70 to $28.60 per note, while the true value, had it been calculated as Credit Suisse represented in the registration statement, was actually between $4.22 and $4.40 per note.  Beginning at 5:10 p.m., the Intraday Indicative Value began to update, revealing a value of $4.22 per note.  On February 6, 2018, Credit Suisse issued a press release announcing that an Acceleration Event took place on February 5, 2018, and, as a result of the acceleration, on or about February 15, 2018, Credit Suisse repurchased the XIV notes at a price below $6.00 per note.  The Complaint alleges that, during the class period, investors purchased XIV notes at artificially inflated values due to Credit Suisse’s misrepresentations, and were harmed thereby.

The case is: Chahal v. Credit Suisse Grp. AG, et al., Case No. 1:18-cv-2319 (AT)(SN), U.S. District Court, Southern District of New York.