Wolf Haldenstein Adler Freeman & Herz LLP Commences Class Action Lawsuit On Behalf Of Investors In VelocityShares Daily 2x VIX Short Term Exchange Traded Notes Linked To The S&P 500 VIX Short-Term Futures Index
Wolf Haldenstein Adler Freeman & Herz LLP today filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of Plaintiff and the other members of the class (“Class”) who purchased VelocityShares Daily 2x VIX Short Term Exchange Traded Notes linked to the S&P 500 VIX Short-Term Futures Index (“TVIX ETNs”) [NYSE ARCA: TVIX] pursuant and/or traceable to a November 29, 2010 pricing supplement (the “Pricing Supplement” and, together with a March 25, 2009 Registration Statement and Prospectus, the (“Offering Documents”)) and held TVIX ETNs through and including March 22, 2012, thereby suffering economic damages (the “Class Period). TVIX ETNs were sold to members of the Class during the Class Period by Credit Suisse AG and its affiliate Credit Suisse Securities (USA) LLC (together, “Credit Suisse” or the “Company”).
The complaint is styled Schottenstein v. Credit Suisse AG, et al., C.A. No. 12-CV-4191 (S.D.N.Y. 2012) and a copy of it is available from the Court, or can be viewed on the Wolf Haldenstein Adler Freeman & Herz LLP website at www.whafh.com.
The complaint specifically details that on February 21, 2012, Credit Suisse announced that it temporarily suspended further issuances of the TVIX ETNs due to “internal limits” reached on the size of the ETNs. As a result of the suspension, shares of TVIX subsequently traded at prices uncorrelated to the S&P VIX Short-term Futures index – the index that the ETN was purportedly designed to track through the use of VIX futures. This “disconnect” lasted for approximately one month.
On March 22, 2012, shares of TVIX declined in price by over 29% as rumors leaked into the market that Credit Suisse was considering whether to recommence issuance of the ETNs. That evening, Credit Suisse announced that it would in part reopen issuance of TVIX shares on a limited basis and on March 23, 2012, shares of TVIX declined further by almost 30% resulting in devastating losses for investors.
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