Press Releases

Major Investor Lawsuit Against Credit Suisse Reopened

April 27, 2021

For Immediate Release:

Lawsuit focuses on materially false and misleading statements about Credit Suisse’s VelocityShares Inverse VIX Short Term Exchange Traded Notes

NEW YORK – The United States Court of Appeals for the Second Circuit issued an order Tuesday that reopened a high-profile lawsuit alleging that Credit Suisse knowingly defrauded investors and caused hundreds of millions in losses.

The decision means that the Southern District of New York must vacate its dismissal of Chahal v. Credit Suisse Grp. AG, et al, and that the case will proceed. Credit Suisse’s misstatements on its VelocityShares Inverse VIX Short Term Exchange Traded Notes, commonly known as and trading under the name XIV, are the central focus of the lawsuit, which was first filed in 2018.

“We believe that Credit Suisse and its former CEO intentionally misled and manipulated investors so that they could profit while investors suffered devastating losses, and we are pleased that this critical case is moving forward,” said Michael B. Eisenkraft, a Partner at Cohen Milstein and a member of the firm’s Securities Litigation & Investor Protection and Antitrust practice groups and a leading attorney on the case against Credit Suisse. “We look forward to prosecuting these claims vigorously on behalf of our clients and the class.”

The lawsuit alleges, among other things, that after observing prior episodes of market volatility, Credit Suisse discerned an ability to depress prices for XIV Notes by purchasing VIX futures contracts on days when volatility spiked. Credit Suisse used this knowledge as part of a scheme to sell millions of XIV Notes before engineering a near-total collapse in their price through just 15 minutes of its own trading. Set Capital further alleges that Janus, although not directly involved in this manipulative scheme, exacerbated the damage by failing to publish accurate prices for XIV Notes during the window of time when the value of those notes collapsed.

The Second Circuit found that “If proven at trial, this alleged conduct was manipulative under our precedents.”

Notably, the Second Circuit also credited the arguments presented by the plaintiffs surrounding the knowledge and motive of former Credit Suisse CEO Tidjane Thiam as part of its reasoning to send this lawsuit back to the Southern District of New York. Citing the plaintiffs’ complaint, the order reads:

“…the complaint plausibly alleges that Thiam was under significant pressure to shift Credit Suisse’s investment arm away from volatile assets like XIV Notes. Accepting these allegations as true, Credit Suisse’s scheme to expand and then destroy the value of XIV Notes would have allowed the bank to profit substantially while realizing Thiam’s strategic goal of “right-sizing” Credit Suisse’s investment division.

The plaintiffs are represented by Michael B. Eisenkraft, Carol V. Gilden, Laura H. Posner and Steven J. Toll of Cohen Milstein Sellers & Toll PLLC and attorneys at Levi & Korsinsky, LLP.


About Cohen Milstein

Cohen Milstein Sellers & Toll PLLC is recognized as one of the premier law firms in the country handling major, complex plaintiff-side litigation. With more than 100 attorneys, Cohen Milstein has offices in Washington, D.C., Chicago, Ill., New York, N.Y., Palm Beach Gardens, Fla., Philadelphia, Pa. and Raleigh, N.C. For additional information, visit or call 202.408.4600.