Credit Suisse has hired Paul Somma to head its exchange-traded note business — a more exotic securities breed that is drawing heightened regulatory scrutiny.
Somma joined about two weeks ago from UBS, where he was a part of that Swiss bank’s ETN desk, according to a source.
ETNs are a sibling of exchange-traded funds, except they’re technically bonds. They’re also much riskier, and have been known to rapidly lose value.
In 2012, Credit Suisse issued an ETN, known as the TVIX, that lost half its value in two days. The plunge in the bond, which is linked to a measure of how often traders buy and sell stock, prompted the Securities and Exchange Commission to push for more regulation this year.
Somma replaces Greg King, who left to join ETF company Global X. Credit Suisse spokeswoman Nicole Sharp declined to comment.