A federal class action lawsuit is seeking to uncover key players behind the alleged widespread manipulation of Wall Street's “fear index,” which plaintiffs claim has resulted in potentially hundreds of millions of dollars in losses to investors nationwide.

The complaint, filed late Friday in Chicago federal court, comes as U.S. regulators are stepping up scrutiny of the CBOE Volatility Index, or VIX, which is widely watched as a measure of investor anxiety. Last month, the Commodity Futures Trading Commission, the U.S. Securities and Exchange Commission and Wall Street's self-regulator, the Financial Industry Regulatory Authority, all indicated they were investigating the possible rigging of the market.

Friday's lawsuit said that unnamed traders were able to manipulate the process for settling VIX contracts by aggressively betting on S&P 500 options prices in order to influence the prices of VIX futures. VIX values are derived from lower-level, illiquid S&P options, meaning that a relatively small number of trades can have disproportionate effect on the VIX.

“By manipulating the VIX derivative market, the defendants not only profited off their deceit at the expense of honest investors, but damaged the integrity of an entire industry,” Michael Eisenkraft, co-counsel for plaintiff Atlantic Trading USA and the putative class said in a statement announcing the suit.

A spokeswoman for Cboe Global Markets Inc., the Chicago-based exchange that controls the VIX, declined to comment on the case and the pending regulatory probes.

According to the complaint, Cboe does not publicly disclose information regarding the traders who use its exchanges, and third-party subpoenas may be necessary to determine the identities of the defendants. An attorney for the plaintiffs said he had not yet contacted Cboe to request access to the confidential records.

Cboe was not named as a party to the suit.

“Because defendants employed acts and techniques that were calculated to wrongfully conceal the existence of such illegal conduct, Plaintiff and the Class could not have discovered the existence of this unlawful conduct any earlier than the announcement of regulatory investigations in early 2018,” the complaint said.

The complaint said the plaintiffs were alerted to the alleged scheme Feb. 13, when lawyers for a whistleblower wrote a letter to regulators, claiming VIX-related rigging. The document also cited a May 2017 paper by two University of Texas at Austin academics that detailed the VIX's vulnerability to manipulation.

Cboe has repeatedly denied that any manipulation occurred.

However, the complaint pointed to a “pattern” of dramatic spikes in trading of S&P options each month when VIX futures and options are about to expire at final settlement. During one session in January, the suit said, the final settlement price jumped from $11.76 to $12.81 on the final day of trading, causing $42.8 million in value to be transferred among contract holders.

“Dramatic price moves and reversions back, such as those exhibited in VIX contracts, are a sign of manipulation,” the document said. “Defendants' misconduct violated the anti-manipulation provisions of the Commodity Exchange Act.”

The suit, filed in U.S. District Court for the Northern District of Illinois' Eastern Division, is seeking punitive or exemplary damages and a constructive trust on the profits the defendants allegedly acquired through unjust enrichment

The case is captioned Atlantic Trading v. Does 1-100.

The proposed class is represented by Eisenkraft, Carol Gilden and Times Wang of Cohen Milstein Sellers & Toll, who are based respectively in New York, Chicago and Washington; along with Anthony Fata and Daniel Herrera of Cafferty Clobes Meriwether and Sprengel in Chicago.