Jane Street under scrutiny for alleged ₹36,500 crore manipulation in Indian Markets

The Securities and Exchange Board of India (SEBI) has taken strict action against Jane Street, a well-known US-based trading company. Jane Street and its related firms have been banned from trading in the Indian stock market after SEBI accused them of cheating the system to earn huge profits. SEBI has also ordered the company to return ₹4,843 crore, which it claims are illegal profits made by manipulating stock market indices.

Jane Street has denied the charges, saying it did nothing wrong. But SEBI’s interim report has raised serious concerns about how the firm traded in India between January 2023 and May 2025. According to SEBI, Jane Street made a total profit of ₹36,671 crore using unfair trading methods, out of which ₹4,843 crore has been found to be against the rules.

What Jane Street did

Jane Street is a global proprietary trading company that uses complex mathematical models to trade stocks and other financial products. It was founded in 2000 and now has more than 3,000 employees, with offices in the US, Europe, and Asia. The firm operates in over 45 countries and had an annual revenue of $20.5 billion in 2024.

In India, Jane Street focused mostly on index options trading, especially using the Nifty and Bank Nifty indices. According to SEBI, Jane Street’s team made massive profits by creating artificial moves in the stock market. These trades were mainly done on expiry days — the last day of trading for options contracts.

SEBI found that Jane Street used two main tricks:

1. Morning pump, afternoon dump:
Jane Street bought large amounts of Bank Nifty-related stocks and futures early in the morning. This made the market go up and created the impression that everything was strong. Later in the day, it sold those positions aggressively, which caused the index to fall. This tactic tricked other traders, especially small retail investors, into thinking the market was rising naturally, when in reality, it was being controlled.

2. Expiry day manipulation:
On 21 different expiry days between January 2023 and May 2025, Jane Street allegedly carried out big trades during the last hours of trading. These trades affected the final closing levels of indices, which play a major role in deciding how much profit or loss traders make in options. By changing the closing index level, Jane Street was able to earn huge amounts in options trades.

According to SEBI, these unfair actions allowed Jane Street to earn:

• ₹44,358 crore from index options

• ₹7,208 crore in losses from stock futures

• ₹191 crore in losses from index futures

• ₹288 crore in losses from the cash market

So, after subtracting the losses from the gains, the firm made a total profit of ₹36,671 crore. SEBI believes that ₹4,843 crore of this is unlawful profit made through manipulation, and has asked the firm to return this amount.

SEBI’s punishment

SEBI has banned four companies linked to Jane Street from taking part in the Indian securities market. These are:

• JSI Investments

• JSI2 Investments Pvt Ltd

• Jane Street Singapore Pte Ltd

• Jane Street Asia Trading

These companies cannot buy, sell, or deal in the Indian stock market — directly or through any other person — until the investigation is over. Banks that hold their accounts have been told to freeze all withdrawals unless SEBI gives special permission.

SEBI’s report says Jane Street did not follow the rules even after being warned. In February 2025, the National Stock Exchange (NSE) had issued a clear advisory asking the company to stop making large trades that could affect market closing levels. Jane Street had promised to change its trading pattern but continued the same behaviour.

SEBI’s report says this shows Jane Street was not acting in good faith and had no intention of following the rules. The regulator said most foreign investors follow Indian market laws properly, but Jane Street ignored clear warnings and misused its power to unfairly profit at the cost of small investors and the overall market health.

The case first gained public attention in 2023 when Jane Street filed a lawsuit in a US court against another hedge fund called Millennium Management. That case revealed that Jane Street had developed a very successful trading strategy based on Indian index options. In 2023 alone, it earned $1 billion from that strategy. Although the firms later settled their dispute, the details led to more media reports and deeper scrutiny of Jane Street’s work in India.

By April 2024, concerns were raised about Jane Street’s unusual trading practices. SEBI started a detailed investigation and published its interim report in July 2025.

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What Happens Next

The matter is still being investigated, and SEBI has not yet issued a final order. For now, the company is barred from trading in India, and its profits are under question. The ban is one of the strongest actions taken by SEBI in recent years and shows that the regulator is serious about protecting Indian markets from manipulation.

Jane Street has denied all the charges and is expected to challenge SEBI’s order. The company says it always follows local laws and has done nothing wrong in its trading in India.

Market experts say this case is very important because it involves one of the biggest trading firms in the world. The outcome of the investigation could lead to tighter rules for foreign investors and more checks on algorithmic and high-frequency trading.

Meanwhile, SEBI has assured investors that Indian markets are strong and fair, and any misuse by big players will be strictly dealt with.

The case against Jane Street has sent shockwaves through the trading community. It shows how big firms can sometimes misuse their tools and knowledge to influence markets unfairly. SEBI’s action is a reminder that even the most powerful traders cannot break the rules and get away with it.

As the probe continues, investors and regulators around the world are watching closely. The final outcome could shape the future of trading regulations in India and beyond.