India’s market regulator, the Securities and Exchange Board of India (Sebi), has ordered a US-based trading giant, Jane Street, to surrender nearly Rs 4,844 crore in alleged unlawful gains from manipulative trading practices.
Massive Impounding Order Issued
Sebi has issued a significant order, directing Jane Street, a global proprietary trading firm, to impound Rs 4,843.57 crore. This amount is identified as illegal gains made through unfair trading practices in the Indian securities market.
Beyond the financial penalty, Sebi has also barred Jane Street from engaging in any securities transactions until these alleged illegal gains are recovered. The regulator expressed a strong stance, stating that the “JS Group is not a good faith actor that can be, or deserves to be, trusted.”
The firm has been given 15 days to provide a full inventory of all its assets in India, including properties, bank accounts, demat accounts, shareholdings, and mutual fund investments. They are explicitly restrained from accessing the securities market, meaning they cannot buy, sell, or deal in securities, directly or indirectly.
Allegations of Price Manipulation
According to Sebi’s order, Jane Street’s trading patterns in several key NIFTY constituent stocks showed a clear bias. Their trades were disproportionately placed at or above the Last Traded Price (LTP), suggesting an attempt to artificially push prices upward.
This behavior was not neutral; instead, it seemed designed to inflate the prices of index stocks during the crucial final two hours of trading. Sebi noted this as a “consistent behavioural pattern” aimed at propping up prices.
Strategic Moves in Futures
The manipulation wasn’t limited to individual stocks. Jane Street was also observed actively trading in NIFTY index futures, particularly in the last hour of trading. Trading in index futures is strategic, as they closely track the index and can amplify market sentiment, influencing short-term index direction.
Sebi highlighted that the settlement value of NIFTY options is tied to the closing index value, which in turn is influenced by underlying constituent prices and index-linked futures. This suggests a coordinated strategy by Jane Street to impact the broader NIFTY index.
Interestingly, this activity was concentrated in the futures segment and was absent in the cash segment. This gave the impression of complying with previous regulatory cautions while still manipulating the market through a different avenue.
Billions in Profits Repatriated
Sebi’s examination revealed that a significant portion of the trading and position-taking in Futures & Options (F&O) by the JS Group was undertaken by its Foreign Portfolio Investors (FPIs). Much of the profits, amounting to Rs 32,681 crore during the examination period, were booked by these FPIs.
The magnitude of these profits far exceeded the average assets held by these FPIs in India, indicating that these substantial gains have likely been repatriated out of the country.
Sebi’s prima facie case suggests that the large and aggressive intraday activities by the Indian entity in index constituent stocks had no economic rationale other than to manipulate the underlying indices. This was done to benefit the much larger index options positions held by the JS Group’s FPI entities.
A Pattern of Disregard
The regulator noted that Jane Street again resorted to these manipulative trading patterns in May 2025, specifically “extended marking the close” interventions. This behavior, just months after Sebi issued a caution letter in February 2025 and despite declarations made to NSE, demonstrated a clear disregard for regulatory advisories.
Sebi emphasized that such “egregious behaviour” in defiance of explicit warnings clearly indicates that Jane Street is not a trustworthy participant in the Indian market.
Who is Jane Street?
Jane Street Group LLC is a global proprietary trading firm established in 2000. Originating from a small office in New York, it has grown to employ over 3,000 people across five global offices, trading various asset classes on more than 200 venues in 45 countries.
In the US, it operates through registered broker-dealers. Sebi’s order identified Jane Street Europe Limited and Jane Street Group, LLC as the holding and ultimate holding companies of JSI Investments Private Limited, the Indian entity.
- Sebi impounded Rs 4,843.57 crore from US firm Jane Street for alleged market manipulation.
- Jane Street is barred from trading in Indian securities until the amount is recovered.
- The firm allegedly manipulated NIFTY constituent stock prices and index futures to create upward pressure.
- FPIs within the JS Group booked and repatriated Rs 32,681 crore in profits.
- This manipulative behavior continued despite previous warnings from regulators.
This decisive action by Sebi underscores its commitment to maintaining the integrity and fairness of the Indian securities market, sending a strong message to all participants.
