SEBI Cracks Down on Alleged Index Manipulation by Jane Street Group

In a landmark Interim Order dated July 3, 2025, bearing number WTM/AN/MRD/MRD-SEC-3/31516/2025-26, SEBI has levelled serious allegations against Jane Street Group, a global proprietary trading firm, for engaging in fraudulent trading strategies in the Indian derivatives market—specifically around Bank Nifty options.

The probe was triggered by media reports referencing a U.S. lawsuit involving Jane Street’s proprietary strategies. SEBI’s investigation uncovered patterns suggestive of market manipulation on index options expiry days, particularly in BANKNIFTY contracts.

SEBI found that Jane Street Group entities:

1. Aggressively bought BANKNIFTY constituents (stocks & futures) to push the index up.

2. Simultaneously built huge short positions in index options (long puts, short calls).

3. Later sold their stock/futures holdings, dragging the index down—resulting in massive options gains.

   
   

SEBI has impounded the entire amount of alleged unlawful gains amounting to Rs. 4,843,57,70,168/-. Entities are directed to open escrow account in a Scheduled Commercial Bank in India to deposit jointly and severally the aforesaid amount of unlawful gains with a lien marked in favour of SEBI and the amount kept therein shall not be released without permission from SEBI.

Further, the Jane Street Group entities are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in Indian securities, directly or indirectly.