SEBI bans U.S.-based Jane Street for index manipulation amounting to over ₹4,800 crore

In its order, SEBI explained the modus operandi of the Jane Street group’s violation in granular detail

The Securities and Exchange Board of India (SEBI) banned U.S.-based investment firm Jane Street from Indian securities markets for manipulating stock index and unlawfully earning ₹4,843 crore, according to an order on Thursday (July 3, 2025).

The entities JSI Investments, JSI2 Investments, Jane Street Singapore, and Jane Street Asia Trading, all part of the J.S. Group manipulated Bank Nifty — the index which has 12 bank stocks — and unlawfully gained a total of ₹4,843.6 crore.

“JS Group first aggressively bought significant quantities of Bank Nifty underlying constituent stocks and futures, temporarily pushing up or lending considerable support to the Bank Nifty index. In the second patch of the day, as has again been demonstrated by data and analysis, J.S. Group was seen to practically and effectively reverse all of this buying activity from the first patch, by aggressively selling large quantities of Bank Nifty underlying constituent stocks and futures,” G. Ananth Narayan, whole time member of SEBI, wrote in his order.

What did the Jane Street group do?

In the order, SEBI explained the modus operandi of the violation in granular detail, backed by data. The capital markets regulator found that J.S. Group was aggressively buying ₹4,370.03 crore of Bank Nifty stocks and futures. This was also a sizeable part of the total transaction of the market. The purchase took place on a day when the index was falling, raising suspicions. This action pushes up the prices of Bank Nifty stocks and effectively the index.

While small investors were misled by this trade, J.S. built trades of ₹32,114.96 crore of bearish positions in the more liquid Bank Nifty index options. It bought cheap put options and sold expensive call options.

The group then reversed and sold all future positions that it had taken, booking losses. This aggressive selling pushed the prices down. This loss was compensated by the profit it booked in the positions it had taken in Bank Nifty index options.

‘Manipulative scheme’

“It appears that the incorporation of the aforesaid company in India enabled the J.S. Group to get around the regulatory prohibition against cash market transactions, which solely applied to FPIs, and thereby execute the manipulative scheme without specifically flouting the FPI Regulations,” Mr. Narayan wrote.

SEBI ordered that the group open an escrow account in a scheduled commercial bank to transfer the money unlawfully earned and has directed banks, depositories and other market institutions not to debit money into the accounts of J.S. Group without SEBI’s permission.

J.S. Group entities have been given 21 days from the receipt of this circular to respond.