SEBI Bars Jane Street Over Index Manipulation

• 10 Jul 2025

On 7th July 2025, India’s market regulator SEBI barred U.S.-based Jane Street from its securities market, alleging manipulation of the Bank Nifty index and triggering massive losses for retail investors.

• SEBI’s interim order alleges Jane Street artificially inflated the Bank Nifty index by purchasing large volumes of its constituent stocks in both cash and futures markets.
• At the same time, the firm allegedly placed short positions in derivatives by buying inexpensive put options and selling costly call options tied to the same index.
• Later in the trading session, Jane Street reportedly reversed its buying activity by selling off index constituents, pushing prices down and profiting from its derivatives positions.
• According to SEBI, this trading pattern gave the illusion of genuine market activity and lured retail traders into making trades based on misleading price levels.
• Jane Street has denied wrongdoing, calling its strategy a legal arbitrage trade used to exploit pricing inefficiencies between options and underlying index components.
• SEBI’s order reveals that on January 17, 2024, Jane Street traded options worth $1.2 trillion—about 353 times the total trading volume of the bank stocks involved.
• The regulator said Jane Street's trades accounted for 15–25% of the total traded value of Bank Nifty stocks on certain days, significantly influencing the index.