UPDATE 1-Credit Suisse sued over U.S. 'volatility' product losses

(Adds Credit Suisse statement)

NEW YORK, March 14 (Reuters) - An investor sued Credit Suisse on Wednesday, alleging that 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 publicly available prospectus accurately and fully disclosed the risks of an investment in XIV, which is only intended for sophisticated institutional clients," the bank said in a statement emailed to Reuters, referring to the product by its former stock ticker.

"Credit Suisse did not engage in any conduct designed to mislead investors regarding XIV's value or cause the February 5, 2018, decline in XIV's price," the bank said.

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.

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 lawsuit seeks class-action status as well as unspecified damages. (Reporting by Trevor Hunnicutt Additional reporting by Jonathan Stempel Editing by Leslie Adler)