Korein Tillery Secures Unmasking of Alleged “Volmaggedon” VIX Manipulators in Important CEA Action
August 19, 2022:
In a ruling issued on August 16 by Judge Manish Shah of the United States District Court for the Northern District of Illinois, Korein Tillery, on behalf of firm client LJM Partners, Ltd., secured an order requiring the Cboe to unmask market participants who allegedly manipulated the Cboe’s Volatility Index (commonly known as the “VIX”) during the so-called “Volmaggedon” spike on February 5-6, 2018. These alleged market manipulators increased implied volatility and the prices of SPX options traded on the Cboe as part of their VIX-targeted manipulation, harming LJM when it traded in directly correlated options on S&P 500 futures and E-mini S&P 500 futures at artificial prices.
The ruling is the result of over three-and-a-half years of litigation conducted by Korein Tillery and co-counsel, including extensive briefing, amending of complaints, and expert analysis to identify the anonymous market participants responsible for the manipulation that harmed LJM. As a result of the order, LJM will be able to name these manipulators in complaints, and pursue its claims under the Commodity Exchange Act on behalf of its investors who lost hundreds of millions of dollars as a result of the manipulation and resulting artificiality in the market.
This decision is the latest success by Korein Tillery in its industry leading practice litigating manipulation claims under the Commodity Exchange Act. It establishes important precedent for unmasking anonymous market participants accused of manipulation under the Commodity Exchange Act, and will allow future commodity and derivatives investors harmed by market manipulation to pursue their claims and force exchanges to identify otherwise anonymous market manipulators.
Korein Tillery was joined in obtaining this result by Scott+Scott, Attorneys at Law, representing Two Roads Shared Trust. A copy of the order can be found here. Under the order, Cboe will be required to identify the Doe Defendants by August 23, 2022; Korein Tillery will then be required to file amended complaints naming the Doe Defendants by August 30, 2022.