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Regulators Open Probe After Whistleblower Exposes "Rampant Manipulation Of VIX"

• https://www.zerohedge.com, by Tyler Durden

The Financial Industry Regulatory Authority is scrutinizing whether traders placed bets on S&P 500 options in order to influence prices for VIX futures, the people said.

Proving manipulation is difficult, lawyers and academics say. The regulator must prove that a person or firm had the ability to move prices and did so intentionally. In addition, the regulator must show that the person intended to create artificial prices, said Craig Pirrong, a professor of finance at The University of Houston who has written about futures manipulation.

As we detailed earlier, we first exposed the "conspiracy fact" that VIX manipulation runs the entire market back in 2015 as the ubiquitous VIX-crushing algo-runs coincided with a non-stop shorting of VIX futures by a seemingly bottomless-pocketed player in the market... which happened to coincide with the arrival of Simon Potter as the head of The New York Fed's trading desk...

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