Congress criticizes SEBI for not taking decisive action against US firm’s market manipulation

The Congress has criticized SEBI for its lack of swift action against market manipulation by Jane Street, a US algorithm trading firm. The party stated that despite numerous warnings and evidence of illegal trading practices, SEBI’s response was delayed, allowing Jane Street to manipulate India’s stock markets and cause significant losses to retail investors.

Jane Street entered the Indian market in 2020, focusing on the Futures and Options (F&O) market known for its volatility and risk. From January 2023 to March 2025, the firm reportedly generated profits amounting to Rs 43,289 crore, with most of these profits now under SEBI’s scrutiny. However, the regulatory response has been described as tepid, with only a 105-page interim order issued on July 3 freezing Rs 4,844 crore in alleged illegal profits, a fraction of Jane Street’s actual gains. Much of the firm’s trading activities are said to be outside SEBI’s investigation.

Despite the significant scale of manipulation, SEBI took nearly four and a half years to take action, according to the Congress. Jane Street’s speculative trades allegedly included the illegal manipulation of stock prices in the direct equity market, using tactics such as marking the close to artificially impact stock prices. These manipulated prices were then utilized in the F&O market through high volumes of Put and Call Options, resulting in illicit profits for Jane Street while causing substantial losses for small investors. It is estimated that 93 percent of retail investors in the Futures market experienced losses during this period, averaging Rs 1.25 lakh per investor.

The Leader of the Opposition, Rahul Gandhi, had reportedly raised concerns about the risks faced by small investors in the F&O market to SEBI and the government, but these concerns were allegedly disregarded. The Congress noted that the government’s inaction, particularly during Madhabi Puri Buch’s tenure as SEBI Chairperson, has called into question the extent of regulatory oversight.

Furthermore, SEBI’s delayed response was emphasized when, in February 2025, the regulator issued a mild warning to Jane Street, allowing the firm to continue its manipulative trading activities until May 2025. By then, Jane Street had supposedly transferred a significant portion of its illicit profits back to the US using India’s Double Taxation Avoidance Agreement, enabling it to avoid paying taxes on its earnings, ultimately undermining India’s financial integrity.