Sebi bars Jane Street, orders ₹4,844 crore impound for alleged index manipulation

Capital markets regulator, the Securities and Exchange Board of India (Sebi), in its interim order issued on Thursday, barred US-based investment firm Jane Street Group entities from accessing the securities market in India, while directing them to disgorge ₹4,843.57 crore in alleged unlawful gains.

According to Sebi’s order, Jane Street's profits from index options alone accounted for over ₹43,289.33 crore between January 1, 2023, and March 31, 2025.

"The total amount of unlawful gains earned by the JS Group from the alleged violations, i.e., ₹4,843,57,70,168, shall be impounded, jointly and severally. Entities are directed to open an escrow account in a scheduled commercial bank in India to deposit jointly and severally the aforesaid amount of unlawful gains," Sebi's 105-page interim order stated.

The Jane Street Group entities operating in India—JSI Investments, JSI2 Investments, Jane Street Singapore, and Jane Street Asia Trading—allegedly manipulated Bank Nifty, the 12-stock banking index, and benefitted in unlawful gains worth ₹4,843.6 crore. These companies have also been barred from accessing the securities market and buying, selling, or otherwise dealing in securities.

"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. In the second patch of the day, as has again been demonstrated by data and analysis, JS Group was seen to practically and effectively reverse all of this buying activity from the first patch, by aggressively selling large quantities of BANKNIFTY underlying constituent stocks and futures," the Sebi order by G. Ananth Narayan, Whole Time Member, stated.

Sebi has given JS Group 21 days to respond. Here are the key findings of the Sebi report.

Two Manipulative Strategies Identified: The Sebi order said Jane Street applied two manipulative strategies—Intra-day Index Manipulation and Extended Marking The Close—to distort prices during market hours and expiry close. Sebi found that on 15 expiry days, the Jane Street Group entities used a two-part trading strategy. First, they aggressively bought BANKNIFTY stocks and futures to push the index upward (Patch 1). Then, they reversed these trades (Patch 2), causing the index to fall. "This resulted in JS Group booking an intraday trading loss of a total of INR 199.7 crores across the aforesaid 15 days. This otherwise irrational loss arose from trades that enabled JS Group to benefit immensely and illegally from the even larger positions that they were creating or carrying in index options. Clearly, therefore, this ‘loss’ can only be viewed as a mala fide cost incurred by the JS Group to perpetrate their prima facie manipulative and fraudulent scheme."

Ignored NSE Warning: Sebi says despite being warned in February 2025, JS Group continued the same trading behaviour as recently as May 2025. "As has been clearly demonstrated in this order, JS Group again resorted to undertaking prima facie manipulative ‘extended marking the close’ trading patterns of large and aggressive intervention in index and constituent markets towards the expiry day closing, so as to influence and manipulate the index to their illegal advantage. The impugned trades in May 2025 are a cynical violation of the caution letter issued to the JS Group on February 06, 2025, and of their own declarations made to NSE in the same month."

Manipulative Scheme: Sebi says JSI Investments Private Limited, the JS Group entity incorporated in India, executed intra-day trades in the cash segment during the examination period. The two FPIs forming part of the JS Group took large positions in the futures and options segment. The intraday cash market transactions undertaken by the Indian entity consistently ended with "large losses." "It appears the incorporation of the aforesaid company in India enabled the JS Group to get around the regulatory prohibition against cash market transactions which solely applied to FPIs, and thereby execute the manipulative scheme without specifically flouting the FPI Regulations."