The Jane Street Saga: Hedge Fund Boss Says He Tipped off SEBI

The Securities and Exchange Board of India took punitive action against Jane Street by banning it from the securities market and seizing its extraordinary profits worth ₹4,844 crore. It has been reported that the markets regulator acted on a tip-off from a whistleblower.

Mayank Bansal who serves as the president of a UAE-based hedge fund said that he was the one who gave the information to the SEBI before the July 3 crackdown.

While speaking to CNBC Awaaz, Bansal said he began noticing “coordinated distortions” in expiry-day trades as early as July in 2023. The patterns were visible in BANK NIFTY and midcap segments.

“By January 2024, it was clear something wasn’t right,” he said. As per Bansal, the trades involved lifting index levels by buying banking stocks like HDFC and ICICI. This triggered a spike in retail call buying, after which Jane Street would reverse its positions by offloading calls and selling the stocks. The heavy selling then forced the index to crash.

Bansal claimed that the strategy intensified in 2024. While speaking to the Hindu, he explained how the alleged manipulation was uncovered through two distinct expiry-day setups. In the first, the firm sold heavily at-the-money options, crushing their value by lowering implied volatility, and then keeping the index tightly range-bound, this move ensured that options expired worthless. The second, a “volatile expiry,” involved buying large volumes of options on one side (typically calls), pumping up their prices irrationally, and then triggering a steep directional move in the cash segment to profit massively from the inflated instruments.

“The distortion was insane,” Bansal told The Hindu. “It was like real estate going for ₹100 one day, and water priced at ₹1 lakh the next.” Nifty was surging 2% by December 2024. Bansal also submitted a formal presentation to SEBI, outlining the trading patterns and their potential regulatory breaches.

He reiterated that these strategies were not only aggressive, but were calculated attempts to manipulate expiry pricing, which violated Unfair Trade Practices Act. “This was not market movement—it was calculated manipulation,” Bansal stated. “SEBI must act decisively so this doesn’t happen again.”

Previously, SEBI banned Jane Street from the Indian Securities market as it indulged in manipulative trading practices that allegedly led to unlawful profits.