Jane Street accused of manipulating Rs 36000 Cr Indian market

US-based trading firm Jane Street allegedly engaged in market manipulation on the Indian stock market between January 2023 and March 2025, allegedly earning an enormous Rs 36,671 crore through unlawful tactics, as reported by the Securities and Exchange Board of India (Sebi). The firm used an aggressive strategy of purchasing select Bank Nifty index stocks in the morning and selling them later in the day, causing significant drops in share prices, leading to losses in stock trades but substantial gains from index options.

Jane Street, an established global proprietary trading firm founded in 2000, has a widespread reach with over 2,600 employees in multiple offices worldwide and conducts trading in numerous countries. In an investigation conducted by Sebi, it was found that over 21 expiry days during the specified time frame, Jane Street executed large trades in the cash and futures markets to influence index levels, enabling them to profit from significant positions in the options market.

Sebi highlighted two primary strategies employed by Jane Street and its related entities to manipulate Indian derivatives markets and accumulate illicit gains. These strategies included the strategic buying and selling of Bank Nifty stocks and futures to impact index levels, as well as concentrated buying or selling during the final hours of the expiry day to influence index movements.

The regulator found that while Jane Street incurred smaller losses in cash and futures trades, the group profited substantially from their operations, raking in Rs 4,843 crore illegally. The JS Group predominantly engaged in index options trading, recording gains of Rs 44,358 crore, outweighing losses incurred in stock futures, index futures, and the cash market.

Sebi pointed out that from January 2023 to March 2025, Jane Street undertook significant trading activities across various segments of the market. The group’s net total profit of Rs 36,671 crore derived from diverse entities, including JSI Investments, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading.

Of the entities involved, Jane Street Singapore Pte Ltd and Jane Street Asia Trading Ltd are registered Foreign Portfolio Investors (FPIs) based in Singapore and Hong Kong. JSI Investments and JSI2 Investments were incorporated in India, with JSI Investments wholly owned by Jane Street Europe Ltd from the UK. Sebi noted that the incorporation of JSI Investments in India enabled the group to bypass regulatory restrictions against FPIs conducting intraday cash market transactions and execute manipulative schemes.

Throughout the examination period, the net profits recorded in FPIs related to the JS Group totaled Rs 32,681 crore, significantly surpassing average portfolio values held by these FPIs in India, indicating repatriation of profits. Sebi’s findings suggest a sophisticated operation by Jane Street using intricate market strategies to amass substantial illicit gains through structured trading dynamics.