Quinn Emanuel Urquhart & Sullivan, LLP Files VIX “Fear Gauge” Manipulation Class Action Suit against the VIX Exchange CBOE

NEW YORK--()--Quinn Emanuel Urquhart & Sullivan, LLP (“Quinn Emanuel”) today announced that it has commenced a class action on behalf of investors who held or traded S&P 500 (“SPX”) option contracts (“SPX Options”), CBOE Volatility Index (“VIX”) option contracts (“VIX Options”), futures based on the VIX (“VIX Futures”), or VIX Exchange Traded Products (“VIX ETPs”) on exchanges run by Cboe Global Markets, Inc. (formerly known as CBOE Holdings, Inc.) and its affiliates (“CBOE”) during the following time periods (“Class Period”):

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  • From March 26, 2004 to the present in the case of VIX Futures and SPX Options;
  • From February 24, 2006 to the present in the case of VIX Options; and
  • From August 2008 to the present in the case of VIX ETPs.

This action was filed in the United States District Court for Northern District of Illinois and is captioned Bueno v. Cboe Global Markets, Inc., et al., No. 18-cv-02435. If you wish to serve as lead plaintiff, you must move the Court no later than June 5, 2018. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Daniel Brockett at (212) 849-7000, or via email at danbrockett@quinnemanuel.com. If you are a member of this class, you can view a copy of the complaint as filed at https://www.quinnemanuel.com/media/1418737/bueno-v-cboe-nd-ill-18-cv-02435-2018-04-05.pdf. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint alleges CBOE participated with others to manipulate the VIX “fear gauge” in a systematic manner during the 2004 to 2018 timeframe. This alleged improper manipulation caused economic damages to investors who traded in VIX futures, options and certain other VIX derivatives. As a consequence of these activities, the complaint alleges that CBOE and a few of its preferred traders violated the Securities Exchange Act of 1934, the Commodity Exchange Act and the Sherman Act.

CBOE runs the exclusive exchange for core VIX financial instruments in the United States and is not permitted to run the VIX market in a “rigged” manner, as the complaint alleges. The complaint alleges that in February 2018, a whistleblower, who reportedly had held senior positions at some of the largest investment firms in the world, disclosed widespread manipulation of the VIX. After these disclosures were made public, one former regulatory official responded that the whistleblower’s claim “rings true.” Another former regulatory official reportedly explained it was “quite clear” that the VIX can be manipulated and that CBOE “should have sprung in to action” to bring any manipulation to a halt. The complaint’s forensic quantitative analysis corroborates the whistleblower’s claim. It also corroborates academic work that was published in a prestigious, peer-reviewed academic journal in May 2017, raising questions about whether the VIX was being manipulated and suggesting various means of demonstrating that it was, in fact, manipulated.

As alleged in the complaint, plaintiff’s recently completed forensic analyses confirm that the VIX was manipulated during the Class Period. The analyses also show, however, that the VIX manipulation abated to some degree in the immediate aftermath of the May 2017 peer-reviewed academic article mentioned above. The complaint alleges these May 2017 changes in the trading patterns underlying the VIX market tend to show defendants’ culpable state of mind because, in essence, they changed their trading behavior when faced with the risk being discovered. These and other facts set forth in the complaint support the allegations that CBOE and its preferred traders were “banging the VIX close” in a systematic manner, throughout the Class Period. CBOE allegedly conferred financial benefits and special trading privileges to a few traders who, in exchange for driving higher trading volume (and fees) for CBOE, enjoyed special privileges that allowed them to game the VIX and manipulate VIX derivative prices to the detriment of the Class. CBOE, in turn, benefitted financially from the manipulation as VIX products were its “flagship” products, which generated much of CBOE’s revenues, as the complaint alleges.

Plaintiff seeks to recover damages on behalf of all investors who lost money trading VIX Options, VIX Futures and other VIX derivatives during the Class Period (the “Class”). The plaintiff is represented by counsel that has extensive experience defending investors’ financial interests and recovering their investment capital where, as the complaint alleges in this case, their losses do not stem from normal market forces but from market misconduct.


Quinn Emanuel is a 780+ lawyer business litigation firm—the largest in the world devoted solely to business litigation and arbitration with 22 global office locations. Firm lawyers have tried over 2,600 cases, winning 88% of them. When representing defendants, Quinn Emanuel’s trial experience gets better settlements or defense verdicts. When representing plaintiffs, Quinn Emanuel lawyers have won over $60 billion in judgments and settlements. Quinn Emanuel has also obtained five 9-figure jury verdicts, thirty-four 9-figure settlements, and fifteen 10-figure settlements. FTI Consulting named Quinn Emanuel the biggest litigation firm in the world. The American Lawyer named Quinn Emanuel the top IP litigation firm in the U.S. and the firm as one of the top six commercial litigation firms in the country. Four times in the last 5 years, we were voted as one of the four “most feared” firms by General Counsels at Fortune 500 companies — the lawyers they “least like to see” on the other side. The UK legal periodical, The Lawyer named us “International Firm of the Year.” Law360 selected us as Antitrust, Appellate, Banking, Class Action, Insurance, Product Liability and IP “Practice Groups of the Year.” Managing IP twice recognized us as having the “Best ITC Litigation Practice” and honored us with the “Patent Contentious West” award. Legal Business has named us “US Law Firm of the Year” three times, and our German offices have been named both IP Litigation and Patent Litigation Firm of the Year by JUVE, Germany’s most prestigious legal publication. Global Investigations Review, a leading legal periodical covering global white collar investigations, named us the “Most Impressive Investigations Practice of the Year.” Global Arbitration Review named us the 11th best arbitration practice in the world. Further information is available at www.quinnemanuel.com.


Quinn Emanuel Urquhart & Sullivan, LLP
Dan Brockett, Partner
Toby Futter, Senior Associate

Quinn Emanuel Urquhart & Sullivan, LLP