Seventh Circuit Affirms Dismissal of Class Action Suit Against Client CBOE
News
July 28, 2022
The Court of Appeals for the Seventh Circuit affirmed a decision issued by an Illinois federal court dismissing all counts against Cboe Global Markets, Inc. in an investor suit over the exchange’s alleged failure to prevent manipulation of its volatility index.
The claims were based on the Securities Exchange Act and the Commodity Exchange Act (CEA). As to the securities claim, the Seventh Circuit found that the plaintiffs’ allegations wereinsufficient to establish Cboe’s intent to deceive. In affirming the dismissal of the plaintiffs’ CEA claim, the Seventh Circuit overturned prior Seventh Circuit law and ended 35 years of precedent that negatively affected futures exchanges and self-regulatory organizations (SROs). Under the CEA, an exchange or SRO can be liable only if it acts in “bad faith.” In a 1987 decision called Bosco v. Serhant, the Seventh Circuit opined that “bad faith” means “negligence” under certain circumstances—a ruling that made it easier for plaintiffs to bring CEA claims against futures exchanges and SROs. In the Seventh Circuit’s decision in Cboe’s case, the court repudiated the Bosco “negligence” standard and adopted a more stringent interpretation of “bad faith” under which Cboe prevailed.
Partner Adam G. Unikowsky argued the case before the court and Partners Gregory M. Boyle, and Reid J. Schar helped lead the team.
© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.
News
July 28, 2022
The Court of Appeals for the Seventh Circuit affirmed a decision issued by an Illinois federal court dismissing all counts against Cboe Global Markets, Inc. in an investor suit over the exchange’s alleged failure to prevent manipulation of its volatility index.
The claims were based on the Securities Exchange Act and the Commodity Exchange Act (CEA). As to the securities claim, the Seventh Circuit found that the plaintiffs’ allegations wereinsufficient to establish Cboe’s intent to deceive. In affirming the dismissal of the plaintiffs’ CEA claim, the Seventh Circuit overturned prior Seventh Circuit law and ended 35 years of precedent that negatively affected futures exchanges and self-regulatory organizations (SROs). Under the CEA, an exchange or SRO can be liable only if it acts in “bad faith.” In a 1987 decision called Bosco v. Serhant, the Seventh Circuit opined that “bad faith” means “negligence” under certain circumstances—a ruling that made it easier for plaintiffs to bring CEA claims against futures exchanges and SROs. In the Seventh Circuit’s decision in Cboe’s case, the court repudiated the Bosco “negligence” standard and adopted a more stringent interpretation of “bad faith” under which Cboe prevailed.
Partner Adam G. Unikowsky argued the case before the court and Partners Gregory M. Boyle, and Reid J. Schar helped lead the team.
© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.
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