Market volatility’s resurgence has been followed by allegations that the VIX index - Wall street’s “fear gauge” - has been manipulated by traders. It is too early to know if these allegations are well-founded, but the inevitable investigations, like all alleged market manipulation cases, will be lengthy, complex, and expensive. These problems will likely be amplified in the VIX context, which has competing regulators and dueling legal standards.
In this article in Law 360, RK&O partner Paul J. Devlin outlines the jurisdictional issues lurking in VIX-related investigations, and highlights the potentially discordant anti-manipulation standards under the securities and commodities laws.
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