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Wall Street "fear gauge" manipulation trial rejected



(Reuters) – A federal judge on Wednesday dismissed a trial in which investors accused the parent of the Chicago Board Options Options Exchange of allowing anonymous traders to target Wall Street headers for future stock market volatility at their expense.

U.S. The District Director Manish Shah of Chicago said investors in the proposed course action failed to show that CBOE Global Markets Inc. intended to pursue them by allowing the manipulation of options and futures linked to the VIX, known as the US stock market's "rescue meter". [19659002] "Although the CBOE may have devised a process with features that made it vulnerable to manipulation," investors did not show that it "knew about these shortcomings at the time of designing the VIX company or the purposefully designed market to facilitate manipulation. , "Judge Shah wrote in a 32-page decision.

Lawyers to investors did not respond promptly to the request for comment. CBOE's lawyers did not immediately respond to similar requests.

VIX, briefly for the CBOE Volatility Index, measures the expected 30-day volatility for US stocks based on the Standard & Poor's 500 options and often rises as stock prices fall.

Investors had accused CBOE in the trial of knowing for years about systemic manipulation of VIX products but did nothing to increase profits and market share.

Cboe called the trial an "unsurpassed attempt" to hold a regulator accountable for speculation that was allowed to manipulate "by unidentified persons on unspecified occasions and led to unspecified losses by unspecified market participants."

VIX became a focus for investors in February 201

8 when the prices of two products tied to it killed more than 80% an anonymous whistleblower alleged manipulation in letters to US financial regulators.

Judge Shah dismissed investors' claims under federal antitrust, securitization and commodity exchange laws without prejudice, meaning they can be returned.

He dismissed a negligence claim with prejudice, as federal law predicted it.

Case is I re Chicago Board Options Exchange Volatility Index Manipulation Antitrust Disputes US District Court, Northern District of Illinois, No. 18-04171.

                    


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