D&G Law

Donaldson Guin Files Securities Class Action over TVIX Exchange-Traded Notes

iStock_000007358300XSmallDonaldson & Guin, LLC has filed a securities class action against Credit Suisse AG, Credit Suisse Securities (USA), LLC and certain officers and directors on behalf of investors in VelocityShares Daily 2x VIX Short-Term Exchange Traded Notes (symbol: TVIX).  The case, captioned Grace Trading, LLC, et al. v. Credit Suisse AG, et al., No. 12-CV-5475 (S.D.N.Y.), asserts claims under the Securities Act of 1933 on behalf of investors who purchased or otherwise acquired VelocityShares Daily 2x VIX Short Term Exchange Traded Notes (“TVIX ETNs”) (ticker symbol “TVIX”), and alleges that the TVIX ETNs were intended to track the level of volatility in the S&P 500 VIX Short-Term Futures Index. However, on February 21, 2012, Credit Suisse temporarily suspended further issuance of the TVIX ETNs, purportedly due to internal limits reached on the size of the ETNs. As a result, the shares increased dramatically in price, trading at prices uncorrelated to the VIX Index. On March 22, 2012, the TVIX ETNs decreased in price by over 29% as market rumors surfaced that Credit Suisse might begin reissuing the shares. That same day, even though volatility in the S&P 500 increased, Credit Suisse announced that it would begin reissuance, and, on March 23rd, the TVIX ETNs plummeted in price by another 30%, resulting in disastrous losses to investors. The Complaint alleges that during the Class Period, Credit Suisse violated the Securities Act by making material misstatements and omissions regarding risks associated with the TVIX ETNs in offering materials. A copy of the complaint is available here.

If you wish to serve as lead plaintiff for the case, you must file a motion with the Court no later than July 24, 2012.  The plaintiffs in this action are represented by Donaldson & Guin, LLC, a firm located in Birmingham and Chicago. If you wish to discuss this action, please contact David Guin.