Investor Alert: Recovery Options for Investors Who Lost Money in Credit Suisse’s XIV Exchange Traded Note (ETN): Part 3
From the Desk of Jim Eccleston at Eccleston Law LLC:
In Part 2, we concluded that this investment product lost 97% of its value in a single day – February 5, 2018 – because Credit Suisse failed to price XIV shares every 15 seconds as it had promised. Unsophisticated buyers lost $700 million to sophisticated, well-informed sellers, according to experts.
When Credit Suisse breached its promise on 4:10 pm to all buyers and sellers of XIV (no matter what brokerage firm those investors held their shares), the next hour spelled doom for the unsuspecting. From 4:10 pm until 5:09 pm, experts conclude that the Credit Suisse was materially misrepresenting the true economic value of XIV. Credit Suisse provided investors with non-updated, incorrect prices of $24 per share, whereas Credit Suisse knew the true economic value was $4 per share.
During the period after 4:15 pm, investors bought 28.8 million shares at an average price of $28.60 – far greater than their true economic value of $4 per share.
But that was not all. In Part 4, we detail a second reason that Credit Suisse harmed unsuspecting buyers of XIV.
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