In the News

“Credit Suisse Must Face Suit over Failed Play on Fear Index,” Bloomberg Law

April 27, 2021

Credit Suisse Group AG must face allegations that it engineered a complex fraud to sink an investment vehicle and profit on investors’ losses, after an appeals court revived the claims.

The lawsuit, filed in 2018, claimed investors lost $1.8 billion in the Feb. 5, 2018, collapse of the market for VelocityShares Daily Inverse VIX Short Term Exchange Traded Notes, known as “XIV Notes,” a derivative investment that increased in value when the stock market was calm and decreased when it was volatile.

Holders of the XIV notes profited inversely from changes in the Chicago Board Options Exchange’s VIX Index, a measure of expected stock market volatility that’s often called Wall Street’s “fear index.”

A group of investors led by Set Capital LLC alleged that they and others lost the money while Credit Suisse made $475 million. The suit also names as defendants two top executives at the bank and Janus Henderson Group PLC, which placed and marketed the XIV notes.

The complete article can be viewed here.