It’s been a week of lawsuits, new licences and leveraging innovation in the structured product world.
Customers of Barclays have filed a class action lawsuit against the UK bank in a New York federal court alleging violations of the Securities Act. A class action filed in the US District Court for the Southern District of New York on behalf of two investors ‘and all other similarly situated’ claims that Barclays allegedly sold unregistered securities and did not return the money after it was caught out.
According to the lawsuit filed on 27 March, two investors that bought thousands of dollars’ worth of unsecured debt securities – Barclays Bank iPath Series B S&P 500 VIX Short Term Futures ETN - from their IRA accounts, had their claims rejected when they sought to take advantage of the Barclays rescission offer. The investors want to represent a nationwide class of investors who bought the securities at issue between 26 June 2019 and 14 March 14 2022.
A group of nine investors are seeking class-action status and are suing both Lincoln and Fidelity Product Services
Also in New York, claims that Credit Suisse caused retail investors significant losses when it chose to de-list its ETN have been rejected. The US District Court for the Southern District of New York has dismissed a putative class action under the Securities Exchange Act of 1934 against Credit Suisse for misrepresentation in relation to the delisting of an exchange-traded note (ETN) linked to a natural gas price index.
According to the ruling of 31 March, the investor alleged that Credit Suisse failed to adequately disclose the risk of a short squeeze in which short sellers are forced to sell their positions at a loss due to rising prices of the underlying securities, and that it engaged in a manipulative scheme when it announced it was delisting the ETN. The court held, however, that the investor failed to adequately allege an actionable misrepresentation and establish ‘scienter or scheme liability’ - intent or knowledge of wrongdoing by Credit Suisse.
A lawsuit brought against Lincoln Financial on 31 March claims that the annuity provider allegedly sold a fixed indexed annuity (FIA) with illustrations that promised big gains that never materialised. A group of nine investors are seeking class-action status and are suing both Lincoln and Fidelity Product Services, provider of the index linked to the Lincoln FIA, according to the US District Court for the Northern District of Texas.
Over in Asia, Crédit Agricole has announced that its securities entity in South Korea has obtained an over-the-counter (OTC) derivatives brokerage licence from the country’s Financial Services Commission. Up until now, Crédit Agricole Securities (Asia) Ltd. (CASAL) activities were focused on the origination of foreign currency bonds for Korean issuers and on the distribution of capital protected investment products to investors. The new licence will enable CASAL further access to the local market and expand its product offering to a wide range of derivatives and derivative-linked notes, covering all types of underlying (rates, FX, equity, credit etc.).
Leonteq has hired Anouch Wilhelms as head public distribution Germany/Austria based in Frankfurt. In his new role, Wilhelms will report to Michael Seifried, head retail flow business at the Swiss structured products specialist, also based in Frankfurt.
The appointment is part of Leonteq’s build up in Germany where it has hired a team of industry experts to drive the newly established retail flow business initiative, which is designed to further grow and diversify Leonteq's product offering and client franchise.
Goldman Sachs has expanded its Visual Structuring pre-trade analytics tool into equities, crypto and precious metals, and launched web and Android versions in addition to the original iOS mobile application for FX released in September 2022. Visual Structuring is a patent-pending tool for options indicative price discovery and trade idea generation for institutional clients, available through Goldman Sachs Marquee which can price variations, assess scenarios, and run backtesting analysis.
In related news, Goldman Sachs significantly decreased its US issuance in Q1 23 - revenues dropped mainly due to a slowdown in its global banking & markets activity. It conceded the crown to Citigroup in the US issuer league table for the retail market in Q1 23. The bank has slipped in fifth place after J.P. Morgan, Morgan Stanley and Barclays by issuance, SRP data shows. During the quarter, the US bank cut its issuance amount by 56.9% to US$2.2 billion across 784 structured notes - its market share shrank to 8.4% from 17.9%.
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