SEBI.
SEBI Bars Jane Street from Market, Slaps Rs 4844 crore fine: SEBI Slams Jane Street with Market Ban and ₹4,844 Crore Disgorgement Over Alleged Index Manipulation Mumbai, India – July 5, 2025 – In a landmark move sending shockwaves through global financial markets, India’s capital markets regulator, the Securities and Exchange Board of India (SEBI), has issued an interim order barring the formidable Jane Street Group from accessing Indian securities markets. The global trading firm has also been directed to disgorge a staggering ₹4,843.57 crores, identified by SEBI as alleged unlawful gains derived from purported manipulation of Indian stock market indices.
The stringent order, passed on July 3, invokes Sections 11(1), 11(4), 11B(1), and 11D of the SEBI Act, 1992. It targets four specific Jane Street entities: JSI Investments Pvt Ltd, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading Ltd.
SEBI’s extensive investigation, spanning from January 2023 to May 2025, uncovered what it describes as a sophisticated and deliberate scheme of index manipulation involving two distinct strategies. The regulator’s findings paint a picture of a calculated approach designed to artificially influence index prices for illicit gains.
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The Two-Phase Orchestration of Market Influence
A detailed case study from January 17, 2024, exemplifies the alleged manipulative tactics. According to SEBI, Jane Street executed a meticulously planned two-phase operation on that day.
In the morning session, the firm allegedly engaged in aggressive buying, acquiring ₹4,370 crores worth of BANKNIFTY underlying constituent stocks and futures. This substantial influx of capital, SEBI contends, temporarily propped up or provided considerable support to the BANKNIFTY index. Simultaneously, Jane Street was reportedly building massive short options positions, accumulating an exposure of ₹32,115 crores.
SEBI’s order highlights the speed and scale of this initial phase: “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.”
The afternoon saw a dramatic reversal. Jane Street allegedly pivoted, selling ₹5,372 crores worth of securities. This selling pressure, SEBI asserts, was intended to drive down the index, allowing the firm to profit handsomely from its pre-established bearish options positions. While the firm incurred a loss of ₹199.7 crores on stock trading across 15 days, its options profits during the same period soared to ₹3,914 crores.
Another concerning pattern identified by SEBI involved concentrated heavy trading in the final 60-90 minutes of trading sessions, allegedly engineered to manipulate favorable settlement prices. On July 10, 2024, for instance, Jane Street reportedly offloaded ₹2,800 crores of securities in the final hour while simultaneously holding a staggering ₹44,154 crores in bearish options positions.
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Warnings Ignored, Trust Eroded
What particularly alarmed SEBI was Jane Street’s alleged conduct even after receiving explicit warnings. In February 2025, the National Stock Exchange (NSE) issued a cautionary letter to the firm, explicitly stating that its trading activities “prima facie appears to be fraudulent and manipulative.”
Despite assurances of compliance from Jane Street, the market watchdog states that the manipulative practices allegedly persisted as recently as May 15, 2025. This alleged defiance led SEBI to conclude that such “egregious behaviour… amply demonstrates that JS Group is not a good faith actor that can be, or deserves to be, trusted.”
Massive Profits Amidst Retail Losses
SEBI’s analysis delves into the broader financial landscape, revealing Jane Street’s overall profits of ₹36,502 crores, with a significant ₹43,289 crores stemming from options trading, even as it incurred losses of ₹7,687 crores in other market segments.
The regulator drew a stark connection between these massive profits and the struggles of individual investors. SEBI noted that a staggering 93 percent of retail Futures & Options (F&O) traders in India lost money during the fiscal years 2022-2024. In a pointed observation, SEBI opined that the “massive profits by the JS Group may well account for some part of these widespread retail losses.”
Prima Facie Violations and Severe Restrictions
SEBI’s findings indicate prima facie violations of several key provisions designed to protect market integrity. The regulator concluded that Jane Street’s trading patterns lacked any economic rationale other than the manipulation of indices. Citing Supreme Court precedent, SEBI observed that “Nobody intentionally trades for loss,” implying that the deliberate losses in stock trading, offset by massive options gains, were indicative of fraud.
Specifically, SEBI found prima facie violations of:
Section 12A of the SEBI Act, 1992, which prohibits manipulative and deceptive devices.
Regulations 3 and 4 of the Prevention of Fraudulent and Unfair Trade Practices Regulations, 2003.
These serious findings prompted SEBI to issue the present interim order, imposing severe restrictions on the Jane Street Group:
A complete ban from securities trading in Indian markets.
An asset freeze on all Indian accounts held by the entities.
A directive to deposit ₹4,844 crores into an escrow account.
A mandate for full asset inventory disclosure within 15 days.
A prohibition on asset disposal without explicit SEBI permission.
While the order is comprehensive, Jane Street has been granted a limited window to manage its existing positions. The firm can only close existing derivative positions within three months and is permitted to settle pre-order transactions.
This interim order marks a significant development in SEBI’s ongoing efforts to curb market manipulation and protect investor interests, particularly those of retail participants. The outcome of the full investigation and any subsequent actions will be closely watched by market participants globally.
