As reported in the Wall Street Journal, the Massachusetts’s securities regulator and the U.S. Securities and Exchange Commission (SEC) are (independently) investigating an exchange-traded note (ETN) managed by Credit Suisse Group that has lost 60% of its value in the past week. Also, the Financial Industry Regulatory Authority has been monitoring the ETN.
According to the Wall Street Journal, Secretary of the Commonwealth William Galvin submitted a written request on March 23 to Credit Suisse for information and documents related to every purchase of shares in the VelocityShares 2x Long VIX Short Term Exchange note from Feb. 20 to March 23. The regulator also is seeking information on what time Credit Suisse filed its statement with the SEC on its plans to reopen issuance of the exchange-traded note, or ETN, beginning on March 23 and who was involved in making that decision.
The scrutiny comes amid investor concern over trading in the ETN. The Credit Suisse product, which is designed to track stock-market volatility, plunged last week even though market volatility was little changed.
“Our goal at this point is simply to seek information,” said Brian McNiff, communications director of the Office of the Secretary of the Commonwealth of Massachusetts. “When we get the requested information we will move on from there. There is no predetermined next step.”
Massachusetts’s securities regulator said Credit Suisse has until April 5 to provide the requested information.
If you have invested in these notes, contact Wittenberg Law immediately at (877) 352-2010.