VIX, a gauge of volatility, is being manipulated, whistleblower claims

In the letter, the whistleblower alleges that market manipulators are costing investors hundreds of millions of dollars each month by taking advantage of a "pervasive flaw" in options exchange trading at Cboe Global Markets in Chicago. The flaw "allows trading firms with sophisticated algorithms to move the VIX up or down by simply posting quotes on S&P options and without needing to physically engage in any trading or deploying any capital," the whistleblower claims.

The whistleblower alleged that the recent market turmoil was partly driven by the scheme and "confirms the fraud and exposes the systemic risk to the entire equity market."