SEBI Bans Jane Street Over Alleged ₹36,500 Crore Market Manipulation
In a major regulatory action, the Securities and Exchange Board of India (SEBI) has taken strict measures against Jane Street, a prominent US-based quantitative trading firm, accusing it of Jane Street market manipulation and making unlawful profits. SEBI has barred Jane Street and four of its affiliated entities from operating in the Indian securities market and ordered the disgorgement of ₹4,843 crore, citing market manipulation between January 2023 and May 2025. Jane Street has rejected these allegations.
Jane Street, a proprietary trading firm established in 2000, operates in over 45 countries and employs more than 3,000 professionals worldwide. With a global presence across the US, Europe, and Asia—including a growing base in Hong Kong—the firm reportedly generated $20.5 billion in revenue in the previous year. In India alone, Jane Street is said to have earned nearly ₹36,671 crore through index options trading during the January 2023 to March 2025 period, a portion of which is now under SEBI’s scrutiny for Jane Street market manipulation.
How Jane Street Allegedly Manipulated the Indian Market
SEBI’s investigation centers around Jane Street market manipulation through its trading strategies on 21 expiry days between January 2023 and May 2025. According to the regulator’s interim order released in July 2025, the firm allegedly deployed two major tactics to influence index levels—referred to as the “morning pump, afternoon dump” and “expiry day index manipulation.”
In the first method, Jane Street reportedly made large purchases of Bank Nifty stocks and futures in the morning to drive up index values. Later in the day, the firm allegedly sold off these holdings aggressively, causing a sharp decline by market close. SEBI stated this created an illusion of bullish sentiment, misleading other investors, especially retail traders.
In the second tactic, the firm is accused of executing large and strategically timed trades in the final hours of options expiry days. These trades allegedly influenced the closing index values, directly affecting the pricing of options contracts. By controlling expiry-day price movements, Jane Street could secure disproportionate profits in index options while incurring smaller losses in the cash and futures segments.
SEBI estimates that Jane Street made ₹44,358 crore in gains from index options while recording losses of ₹7,208 crore in stock futures, ₹191 crore in index futures, and ₹288 crore in the cash market. This brought the firm a net profit of ₹36,671 crore, with ₹4,843 crore flagged as illegal gains, adding to the severity of the Jane Street market manipulation case.
SEBI’s Disciplinary Measures and Ongoing Probe
As a result of its findings, SEBI has imposed a trading ban on four Jane Street-linked entities: JSI Investments, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading. These firms have been barred from buying, selling, or dealing in any Indian securities until the investigation concludes. Additionally, SEBI has instructed banks to freeze withdrawals from the accounts of these entities unless permitted by the regulator.
SEBI’s report criticized Jane Street for ignoring a February 2025 advisory from the National Stock Exchange (NSE), which had warned the firm about suspicious expiry-day trades. Despite assuring the NSE that such actions would stop, Jane Street allegedly continued executing aggressive market-moving trades near closing hours.
Calling the firm’s behavior “egregious” and “in defiance” of regulatory advice, SEBI concluded that Jane Street does not act in good faith like the majority of foreign institutional investors. The ongoing probe into Jane Street market manipulation could set a precedent for how global trading firms operate in emerging markets like India.
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