Investor Alert: Recovery Options for Investors Who Lost Money in Credit Suisse’s XIV Exchange Traded Note (ETN): Part 2
From the Desk of Jim Eccleston at Eccleston Law LLC:
In Part 1, we asked how this investment product could have lost 97% of its value in a single day – February 5, 2018.
The answer is timely pricing. Credit Suisse promised investors holding XIV that it would publish an estimate of the current economic value of XIV shares every 15 seconds based on real time VIX futures prices. However, Credit Suisse did not do so.
4:10 pm is a pivotal time. According to experts, it is at that time that Credit Suisse effectively stopped updating its estimate of the current economic value of XIV shares when VIX futures prices were changing significantly.
In Part 3, we discuss the specifics, and how unsuspecting buyers of XIV shares were duped (at least until they can recover through litigation) out of approximately $700 million by sophisticated, well-informed sellers.
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