Jane Street Group Barred from Indian Markets Over Alleged ₹4,843 Crore Manipulation!

The Securities and Exchange Board of India (SEBI) has delivered a seismic shock to the financial world, issuing an interim order on July 3rd that effectively slams the door shut on the Jane Street Group's access to Indian securities markets. The global trading giant has also been hit with a massive directive: disgorge an eye-watering ₹4,843.57 crores, representing what SEBI alleges were unlawful gains from a sophisticated scheme to manipulate Indian stock market indices.

This significant order, issued under various sections of the SEBI Act, 1992, targets four entities linked to the Jane Street Group: JSI Investments Pvt Ltd, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading Ltd.

A Deceptive Dance: How Alleged Manipulation Unfolded

SEBI's in-depth investigation unearthed a pattern of alleged manipulation carried out by the four Jane Street entities between January 2023 and May 2025. The regulator identified two distinct, yet equally concerning, strategies at play.

"JS Group first aggressively bought significant quantities of BANKNIFTY underlying constituent stocks and futures, temporarily pushing up or lending considerable support to the BANKNIFTY index," the SEBI order detailed, revealing the initial phase of their alleged tactics.

Taking January 17, 2024, as a chilling case study, Jane Street allegedly executed a two-phase operation designed to distort the market. In the morning, the firm reportedly went on an aggressive buying spree, acquiring ₹4,370 crores worth of BANKNIFTY stocks and futures. This substantial purchasing power, SEBI contends, artificially propped up the index. Simultaneously, the firm was busy building a staggering ₹32,115 crores in short options positions – a move that would only pay off if the index later fell.

SEBI's analysis of this specific morning revealed the swift execution: "In the first 8 minutes, JS Group had net bought ₹572 crores worth aggressively... At the same time, JS Group had also managed to put up effective cash equivalent short BANKNIFTY exposure of ₹8,751 crores."

Then came the alleged pivot. In the afternoon, Jane Street supposedly reversed course, offloading a colossal ₹5,372 crores worth of securities. The aim? To drive down the very index they had earlier inflated, thereby cashing in on their pre-established options positions. While the firm reportedly incurred a loss of ₹199.7 crores on stock trading across 15 days, their options profits soared to a staggering ₹3,914 crores.

Further scrutiny by SEBI highlighted a particularly concerning pattern: concentrated, heavy trading in the final 60-90 minutes of the trading day. This frantic activity, the regulator believes, was engineered to create favorable settlement prices. A prime example cited was July 10, 2024, when Jane Street allegedly sold ₹2,800 crores of securities in the final hour, all while holding a massive ₹44,154 crores in bearish options positions.

Warnings Ignored, Trust Broken

What truly incensed SEBI was Jane Street's alleged conduct even after receiving explicit warnings. In February 2025, the National Stock Exchange (NSE) reportedly issued a cautionary letter, explicitly stating that the firm's trading activities "prima facie appears to be fraudulent and manipulative."

Despite assurances of compliance, the market watchdog asserts that Jane Street continued its alleged manipulative practices as recently as May 15, 2025. "Such egregious behaviour... amply demonstrates that JS Group is not a good faith actor that can be, or deserves to be, trusted," the SEBI order sharply declared.

Unpacking the Profits and Wider Implications

SEBI's comprehensive analysis revealed that Jane Street's overall profits amounted to an astonishing ₹36,502 crores. This figure was largely driven by ₹43,289 crores from options trading, even as the firm incurred ₹7,687 crores in losses in other market segments. The regulator didn't shy away from connecting these colossal profits to broader market concerns, pointing out that a disheartening 93 percent of retail Futures & Options (F&O) traders lost money between FY22 and FY24.

"The massive profits by the JS Group may well account for some part of these widespread retail losses," SEBI opined, suggesting a direct link between Jane Street's alleged gains and the financial woes of ordinary investors.

SEBI's Verdict: Fraud and Manipulation

SEBI's findings indicate prima facie violations of the SEBI Act's anti-manipulation provisions and fraud regulations. The regulator concluded that Jane Street's trading patterns lacked any legitimate economic rationale, serving no purpose other than index manipulation.

Echoing a Supreme Court precedent about deliberate losses being indicative of fraud, SEBI observed, "Nobody intentionally trades for loss." The interim order specifically cited prima facie violations of:

Section 12A of the SEBI Act, 1992 (dealing with manipulative and deceptive devices);

Regulations 3 and 4 of the Prevention of Fraudulent and Unfair Trade Practices Regulations, 2003.

Severe Restrictions Imposed

This damning assessment prompted SEBI to issue the interim order, imposing a series of severe restrictions on the Jane Street Group:

Complete ban from securities trading in India.

Asset freeze on all Indian accounts.

A mandate to deposit ₹4,844 crores into an escrow account.

Requirement to provide a full asset inventory disclosure within 15 days.

Prohibition on asset disposal without explicit SEBI permission.

While the firm can close existing derivative positions within three months and settle pre-order transactions, the message from SEBI is crystal clear: the alleged manipulation will not be tolerated.