NEW YORK, March 14 (Reuters) - An investor sued Credit Suisse on Wednesday, alleging that bank 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 bank and linked to expectations of future price swings, or volatility, in the S&P 500 stock index sank by more than 90 percent over a few hours last month following a stock market selloff.
Credit Suisse later took the product, once worth $1.6 billion and known as the VelocityShares Daily Inverse VIX Short-Term Exchange-Traded Note, off the market.
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. Credit Suisse has said the risks and intended uses were disclosed to investors.
But the investor, in a lawsuit filed in U.S. District Court in Manhattan, said Credit Suisse “manipulated” the notes by liquidating its holdings in various financial products to avoid a loss.
The bank did not immediately respond to a request for comment.
The lawsuit seeks class-action status as well as unspecified damages. (Reporting by Trevor Hunnicutt Additional reporting by Jonathan Stempel Editing by Leslie Adler)