Credit Suisse Defeats Investor Suit Over Inverse VIX Crash
Law360 (September 25, 2019, 6:17 PM EDT) -- A New York federal judge ruled Wednesday that Credit Suisse expressly warned investors that buying short-term notes that were inversely tied to stock market volatility was risky before the price of those notes crashed last year.
U.S. District Judge Analisa Torres adopted a magistrate judge's recommendation to dismiss, without leave to amend, a consolidated securities suit that claimed Credit Suisse schemed to trigger a liquidity crunch that caused the price of its Inverse VIX Short exchange-traded notes, or VIX, to drop nearly 96% after the close of regular trading hours on Feb. 5, 2018.
The crash caused an "acceleration event" that...
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