The Securities and Exchange Board of India (SEBI) alleges that the American trading firm Jane Street deliberately employed a strategy on the day of derivatives expiry to manipulate the market in a specific direction. According to SEBI, the company resorted to manipulation to profit from its large index option positions.
In a significant action in the Indian stock market, SEBI has taken a strict stance against the American trading firm Jane Street. SEBI stated that the company was intentionally manipulating the market with the aim of making substantial profits from its index option positions.
SEBI's investigation revealed that Jane Street adopted a specific strategy before the market closed. On expiry days, when trading activity is low, the firm would drive up the prices of shares to benefit its option positions.
Trading Ban and Order to Return Funds
SEBI has immediately prohibited Jane Street from trading in the Indian stock market. The company has also been ordered to return earnings of ₹4844 crore. This order was issued by SEBI's whole-time member, Anant Narayan, in a 105-page document.
The order states that Jane Street will be kept out of the market until it fully returns the illegal earnings. Furthermore, exchanges have been instructed to monitor every activity of the JS Group and ensure that the company does not engage in any further market manipulation.
How the Profit Scheme was Executed
According to SEBI's report, Jane Street had pre-existing positions in the options segment. Subsequently, it purchased select shares in the cash and futures segments, which led to an increase in share prices. Particularly during the final hours of the market, when trading volume is low, the company engaged in aggressive trading, manipulating the market to its advantage.
This strategy allowed the company to make significant profits in options.
Heavy Buying in Bank Nifty Stocks
SEBI's investigation revealed that Jane Street engaged in heavy buying of 12 major stocks of Bank Nifty and their futures. The prices of these shares were deliberately inflated to generate huge profits from their existing positions in the options market.
The notable aspect was that the company placed orders for these shares at or above the last traded price. This resulted in these shares closing at higher levels, benefiting Jane Street in the options segment.
Violation of Regulations Alleged
SEBI stated that Jane Street's activities were against the PFUTP (Prohibition of Fraudulent and Unfair Trading Practices) regulations. This regulation explicitly states that no company or individual can attempt to influence or mislead the market.
The methods adopted by Jane Street were found to be completely in violation of the regulations.
Thousands of Crores in Profit in Three Years
SEBI revealed that Jane Street earned approximately ₹44,358 crore from options trading between January 2023 and March 2025. However, during the same period, the company also incurred some losses in the futures and cash segments.
- Loss of ₹7208 crore in stock futures
- Loss of ₹191 crore in index futures
- Loss of ₹288 crore in the cash segment
Despite these losses, the company made a net profit of ₹36,671 crore.
SEBI's Strong Action Deemed Necessary
According to SEBI, Jane Street's activities were detrimental to market transparency and fairness. SEBI stated that the investigation is not yet complete, but immediate action was necessary based on the facts that have emerged.
SEBI also stated that Jane Street would not be permitted to trade in any form and its activities would be monitored until the investigation is complete.
Suspicions of Manipulation in Several Shares
SEBI suspects that Jane Street employed similar strategies not only in stocks related to Bank Nifty but also in other shares. The company has the capacity to move the market with large capital and, as a result, could harm small investors.
