A second antitrust lawsuit by a group of investors claiming that Cboe Global Markets Inc. let traders rig its volatility index was dismissed Monday by U.S. District Judge Manish Shah in Chicago.
The index, known as VIX and also called the fear gauge, measures expected 30-day volatility for U.S. stocks based on S&P 500 options.
The plaintiffs argued in their complaint that Cboe made VIX products "extremely replicable" and therefore susceptible to manipulation, to attract and keep liquidity providers paying transaction fees.
Mr. Manish dismissed the plaintiff's first proposed class action in May because it failed to establish loss causation, among other weaknesses, but gave them a chance to amend their complaint.
The second attempt sought to hold Cboe negligent for its enforcement of rules aimed at preventing manipulation of the index, but Mr. Manish ruled that "any manipulation that occurred was unintentional or negligent (from Cboe's perspective)," and granted Cboe's motion to dismiss the case. The second dismissal with prejudice prevents further attempts to file a complaint.
“We are pleased with the decision to grant our motion and dismiss the claims against Cboe with prejudice. Throughout this litigation, we have vehemently denied plaintiffs’ allegations against Cboe,” a Cboe spokeswoman said.