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ARTICLE · 16 MARCH 2018

Proprietary Trading Firm Accuses Unknown Traders Of Manipulating CBOE Volatility Index

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A proprietary trading firm filed a complaint accusing unknown traders of manipulating the Chicago Board Options Exchange Volatility Index ("VIX index").

United StatesLitigation, Mediation & Arbitration
Hogan Lovells Cadwalader
Hogan Lovells Cadwalader
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A proprietary trading firm filed a complaint accusing unknown traders of manipulating the Chicago Board Options Exchange Volatility Index ("VIX index").

In the class action complaint filed in the U.S. District Court for the Northern District of Illinois, Atlantic Trading USA, LLC ("Atlantic Trading" or the "Plaintiff") alleges that unknown persons and entities (the "Defendants") have been manipulating the monthly final settlement prices of expiring VIX contracts since 2011. Atlantic Trading regularly trades VIX contracts and claims to have suffered financial losses as a result of the alleged manipulation.

The VIX index, also known as the "fear gauge," measures the 30-day implied volatility of the S&P 500 Index ("SPX"). The Chicago Board Options Exchange ("CBOE") calculates the final settlement price for VIX contracts based on the SPX options orders on the settlement day for the contract. During this time, the Plaintiff alleges that Defendants manipulated SPX

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