On March 15, 2018, Gibbs Law Group and Milberg Tadler Phillips Grossman filed a class action lawsuit on behalf of investors of Credit Suisse VelocityShares Daily Inverse VIX Short Term ETNs (Nasdaq: XIV) who invested between January 29, 2018 and February 5, 2018. The lawsuit seeks to recover damages for XIV investors under the federal securities laws.

XIV Investment Product Designed to Return Inverse Performance of Market Volatility Index

Credit Suisse’s XIV is designed to give the opposite return of the CBOE Volatility index (VIX), the market’s widely-followed turbulence gauge. The Volatility Index reflects traders’ expectations for rough patches in the stock market, and usually trades in the opposite direction to the S&P 500. As stocks surged last year, the Credit Suisse’s XIV Note became popular. According to media reports, the note has approximately $1.9 billion in assets.

See amended class action complaint here.

Credit Suisse Announces It Will Liquidate and End Trading in Velocity Shares Daily Inverse VIX; Investors Likely to Suffer Astronomical Losses

Late in the day on February 5, 2018, Credit Suisse announced that it will no longer issue new units of the exchange-traded notes, and that the last day of trading for XIV would be February 20, 2018. The bank announced that it triggered this liquidation because the previous three days of market volatility rendered the product unable to keep up with the scenario it was supposed to track: a calm market.

That means those still holding XIV will get cash on Feb. 21 for the value of XIV on that date. According to the Wall Street Journal, it is expected that the liquidation will result in a payout amount that could be far less than the level investors bought XIV. The ETN closed at $99 a share Monday and then its “closing indicative value” dropped to $4.22, according to the note’s website.

“It’s blowing up as we speak.”

A variety of financial media publications, including the Wall Street Journal, CNBC, and MarketWatch reported on the unprecedented drop in XIV. Jim Cramer said Monday during a CNBC special report, referring to the product, “That’s the Instrument that’s Going Haywire…it is blowing up as we speak.”

Gibbs Law Group's Financial Fraud Experience

Gibbs Law Group’s financial fraud and securities lawyers have more than two decades of experience prosecuting fraud. Our attorneys have successfully litigated against some of the largest companies in the United States, and we have recovered more than a billion dollars on our clients’ behalf.

We have fought some of the most complex cases brought under federal and state laws nationwide, and our attorneys have been recognized with numerous awards and honors for their accomplishments, including Top 100 Super Lawyers in Northern California, Top Plaintiff Lawyers in California, The Best Lawyers in America, and rated AV Preeminent (among the highest class of attorneys for professional ethics and legal skills).

Noteworthy Financial Fraud Cases

American Express Financial Advisors Securities Litigation $100 million cash settlement for clients alleging American Express steered them into under-performing “shelf space funds” to reap kickbacks
Chase Bank “Check Loan” Litigation $100 million settlement for consumers alleging Chase offered long-term fixed-rate loans, only to later more-than-double required payments
Peregrine Financial Group Customer Litigation Settlements worth $75 million for futures and commodities investors who lost millions in the collapse of Peregrine Financial Group, Inc.
NantHealth Court-appointed Co-Lead Counsel in a securities class action alleging the company’s founder violated federal securities law and artificially inflated stock prices

Our Team

Eric Gibbs

Eric has served in leadership positions in a number of high profile, complex financial lawsuits. He has been recognized as a Daily Journal, among the Top 100 Super Lawyers in Northern California, and a Law360 MVP for Consumer Protection.

David Stein

David’s advocacy has generated major recoveries for consumers impacted by financial fraud. He was named to the Top 40 Under 40 by Daily Journal and a “Rising Star in Class Actions” by Law360.

Michael Schrag

Michael has over 20 years of experience representing individuals in complex cases involving banking credit card and other financial frauds.