The Securities and Exchange Board of India (SEBI) has taken unprecedented action against Jane Street, a leading global quantitative trading firm, alleging that it manipulated Indian market indices to earn unlawful profits. Between January 2023 and March 2025, Jane Street reportedly used “pump-and-dump” tactics and targeted trades on expiry days to influence the Nifty and Bank Nifty indices. SEBI’s investigation revealed that the firm earned approximately ₹36,671 crore from index options trading during this period, with ₹4,843 crore identified as illegal gains that must be returned. Consequently, SEBI has banned Jane Street and four affiliated entities from the Indian securities market and directed banks to freeze their accounts.
According to SEBI’s interim order, Jane Street employed two key strategies: buying large volumes of Bank Nifty stocks and futures early in the day to artificially raise the index, then selling aggressively by market close to depress it, misleading other investors about market strength. Additionally, the firm executed substantial trades during the final hours of expiry days to manipulate index closing levels, thereby impacting options pricing. While Jane Street incurred losses in stock and index futures and the cash market, these were outweighed by massive profits in index options, resulting in a net gain of ₹36,671 crore.
SEBI criticized Jane Street for repeatedly ignoring regulatory warnings and advisories, particularly following a February 2025 caution from the National Stock Exchange (NSE) to cease manipulative trading near market close. The regulator described Jane Street’s conduct as a “clear disregard” for market integrity and ruled that the firm cannot be trusted as a good-faith participant. The ongoing probe has led SEBI to prohibit the firm from any securities trading in India until the investigation concludes, marking a significant move against market manipulation by a major international trading entity.
