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Credit Suisse sued over U.S. 'volatility' product losses

Reuters  |  NEW YORK 

By Trevor Hunnicutt

NEW YORK (Reuters) - An investor sued on Wednesday, alleging that misstatements about a complex product betting on stock market swings led to losses for people who bought in at inflated prices.

A popular product offered by the and linked to expectations of future price swings, or volatility, in the <.SPX> stock index sank by more than 90 percent over a few hours last month following a stock market selloff.

later took the product - once worth $1.6 billion and known as the VelocityShares Daily Inverse Short-Term - off the market.

"The publicly available prospectus accurately and fully disclosed the risks of an investment in XIV, which is only intended for sophisticated institutional clients," the said in a statement emailed to Reuters, referring to the product by its former stock ticker.

"did not engage in any conduct designed to mislead investors regarding XIV's value or cause the February 5, 2018, decline in XIV's price," the said.

The bank's chief executive, Tidjane Thiam, has said the product was "legitimate" and said investors took their own risks on a trade that did not pan out.

But the investor, in a lawsuit filed in in Manhattan, said "manipulated" the notes by liquidating its holdings in various to avoid a loss.

The lawsuit seeks class-action status as well as unspecified damages.

(Reporting by Trevor Hunnicutt; Additional reporting by Jonathan Stempel; Editing by Leslie Adler)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, March 15 2018. 05:14 IST