SEBI Bars Jane Street Over Index Manipulation

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.