A federal judge has dismissed an investor class action alleging the Chicago Board Options Exchange facilitated the manipulation of its closely-watched VIX index to benefit itself financially.

The VIX, CBOE’s most profitable product, measures stock market volatility and is widely known as Wall Street’s “fear gauge.” In a class action filed in April 2018, investors said they suffered losses as a result of anonymous traders manipulating a VIX settlement process that CBOE must have known was defective.

But U.S. District Judge Manish S. Shah on Wednesday granted CBOE’s motion to dismiss, finding the plaintiffs had failed to adequately plead the exchange intentionally designed a process that was vulnerable to manipulation.

“[T]he facts alleged in complaint do not support the conclusion that CBOE knew about these flaws at the time it designed the VIX enterprise or that it purposefully designed the market to facilitate manipulation,” he said in his decision.

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“A more compelling inference is that CBOE (like the SEC, who approved nearly all aspects of the design) thought it included adequate safeguards,” the judge added.

Shah did, however, give the plaintiffs leave to amend all the claims in their complaint except one for negligence.

As Reuters reports, the VIX “became a focus for investors in February 2018 when the prices of two products tied to it plunged more than 80 percent, and an anonymous whistleblower alleged manipulation in letters to U.S. financial regulators.”

The class-action plaintiffs included investors who bought and sold VIX-linked derivatives. They alleged CBOE’s “desire for profits and market share” led it “to push VIX Options and VIX Futures into the marketplace even though it knew they were flawed, and to allow them to remain there, even though it knew they were being manipulated.”

But Judge Shah noted that although the VIX franchise “was especially lucrative to CBOE, CBOE did not enjoy any additional benefit from the manipulation itself. It merely earned the same trading fees it would have for any legitimate transaction.”

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