SEBI bars Jane Street Group from Indian securities markets over alleged index manipulation

The Securities and Exchange Board of India (SEBI) on July 3 passed an interim order barring the Jane Street Group from accessing Indian securities markets and also directed the global trading firm to disgorge ₹4,843.57 crores - the alleged unlawful gains made from purported manipulation of Indian stock market indices. .The order passed on July 3 was issued under Sections 11(1), 11(4), 11B(1) and 11D of the SEBI Act, 1992 against four entities - JSI Investments Pvt Ltd, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading Ltd."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 order said..SEBI's investigation identified manipulation by four Jane Street entities between January 2023 and May 2025 and involved two distinct strategies.Using January 17, 2024 as a case study, Jane Street allegedly executed a two-phase operation. In the morning , the firm aggressively bought ₹4,370 crores of BANKNIFTY stocks and futures, artificially propping up the index while simultaneously building ₹32,115 crores in short options positions."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," SEBI noted..In the afternoon, Jane Street reversed course, selling ₹5,372 crores worth of securities to drive down the index and profit from its options positions. While the firm lost ₹199.7 crores on stock trading across 15 days, it made ₹3,914 crores in options profits.This involved concentrated heavy trading in the final 60-90 minutes to engineer favorable settlement prices. On July 10, 2024, Jane Street sold ₹2,800 crores of securities in the final hour while holding ₹44,154 crores in bearish options positions..What particularly troubled SEBI was Jane Street's conduct after explicit warnings. In February 2025, NSE issued a cautionary letter stating the firm's trading prima facie appears to be fraudulent and manipulative. Despite assurances of compliance, Jane Street allegedly continued manipulative practices as recently as May 15, 2025, the market watchdog said."Such egregious behaviour... amply demonstrates that JS Group is not a good faith actor that can be, or deserves to be, trusted," the order stated. .SEBI's analysis revealed Jane Street's overall profits of ₹36,502 crores, with ₹43,289 crores from options trading while losing ₹7,687 crores in other segments. The regulator connected this to broader market concerns, noting that 93 percent of retail F&O traders lost money during FY22-FY24.The massive profits by the JS Group may well account for some part of these widespread retail losses, SEBI opined.SEBI found prima facie violations of the SEBI Act's anti-manipulation provisions and fraud regulations, concluding that the trading patterns had no economic rationale other than index manipulation."Nobody intentionally trades for loss," SEBI observed, citing Supreme Court precedent about the deliberate losses being indicative of fraud..SEBI stated it found prima facie violations of:Section 12A of the SEBI Act, 1992 (manipulative and deceptive devices);Regulations 3 and 4 of the Prevention of Fraudulent and Unfair Trade Practices Regulations, 2003..This prompted SEBI to pass the present interim order. The interim order imposes severe restrictions:Complete ban from securities trading;Asset freeze on all Indian accounts;₹4,844 crores deposit in escrow account;Full asset inventory disclosure within 15 days;Prohibition on asset disposal without SEBI permission.Jane Street can only close existing derivative positions within three months and settle pre-order transactions..[Read Order].Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.