SEBI Takes Bold Action Against Jane Street Group for Alleged Market Manipulation
SEBI's Major Move Against Jane Street Group
New Delhi: The Securities and Exchange Board of India (SEBI) has imposed a ban on the Jane Street Group, a US-based trading firm, from participating in the securities markets. The regulator has also mandated the group to return unlawful profits amounting to ₹4,843 crore, following allegations of stock index manipulation through derivative positions.
This penalty could represent the largest disgorgement ever ordered by SEBI.
In its interim ruling, SEBI has prohibited JSI Investments, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading—collectively known as the Jane Street Group—from trading until further notice, as investigations continue.
Founded in 2000, Jane Street Group LLC is a prominent global proprietary trading firm, employing over 2,600 individuals across five offices in the US, Europe, and Asia, and engaging in trading activities in 45 countries.
The group has come under scrutiny for allegedly manipulating stock market index levels to generate illicit profits, particularly through the highly liquid Bank Nifty and Nifty index options.
SEBI's investigation uncovered that during 21 expiry days from January 2023 to May 2025, the group executed significant trades in both cash and futures markets to sway index movements and capitalize on substantial options market positions.
Two primary strategies were identified: one involved heavy buying of Bank Nifty stocks and futures in the morning, followed by aggressive selling in the afternoon to create a softer market close; the other involved concentrated trading in the final two hours of expiry day to influence index levels.
These tactics enabled the group to amass illegal profits of approximately ₹4,843 crore, despite incurring smaller losses in cash and futures trades, according to the regulator.
SEBI also highlighted that from January 2023 to March 2025, the Jane Street Group engaged in extensive trading across various market segments, achieving gains of ₹44,358 crore from index options trading, which constituted the majority of their profits.
However, these profits were partially offset by losses of ₹7,208 crore in stock futures, ₹191 crore in index futures, and ₹288 crore in the cash market. After accounting for all gains and losses, the group reported a net profit of ₹36,671 crore during this timeframe.
The case originated from media reports in April 2024, which indicated that Jane Street and its affiliates might have employed unauthorized proprietary trading strategies within the Indian options market.
SEBI noted that the Jane Street Group persisted in suspicious trading activities, particularly near market close on expiry days, executing large and aggressive trades to unfairly influence the index, even after receiving a warning in February and committing to cease such practices.
"Such blatant misconduct, in clear defiance of the explicit advisory issued by NSE in February 2025, clearly indicates that unlike the majority of Foreign Portfolio Investors and other market participants, the JS Group is not a trustworthy entity," SEBI stated.
"Given the strong prima facie case that allowing the JS Group to operate as before could severely jeopardize investor protection on an extraordinary scale, SEBI is obligated to intervene directly," the regulator added.
Consequently, SEBI declared that the total amount of unlawful gains, ₹4,843.57 crore, will be impounded jointly and severally.
The entities have been "restricted from accessing the securities market and are further prohibited from buying, selling, or otherwise dealing in securities, directly or indirectly."
Moreover, banks where these entities maintain accounts have been instructed to ensure that no debits occur without SEBI's approval, except for compliance with this order.