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Sebi bars Jane Street from markets, orders disgorgement of ₹4,844 crore
'I am also convinced that interim cease and desist directions are warranted in the facts of this case. Also, until the completion of the investigation and the related proceedings, it is imperative that exchanges should monitor any future dealings and positions of JS Group closely on an ongoing basis, to ensure that they do not, either directly or indirectly, indulge in any kind of manipulative activity. This is crucial to preserve the overall faith in the ecosystem and to protect investors,' wrote Ananth Narayan, Whole-time Member, Sebi, in a 105-page order issued late Thursday.
According to the Sebi order, Jane Street's modus operandi included building aggressive positions in the options segment and then influencing the price in the underlying stock market, where volumes tend to be relatively low. During weekly index option expiry days, by influencing the underlying cash and futures market with significant volumes, Jane Street sought to earn profits by manipulating the index levels.
The Sebi investigation found that Jane Street accounted for a significant portion of the net buying in the 12 Bank Nifty component stocks and their futures. The 'burst of buying' was intended to influence the price of these securities, which in turn allowed the firm to put on significantly larger and profitable positions in the highly liquid index options segment.
'Jane Street Group placed a disproportionately high number of buy orders at or above the last traded price in Bank Nifty constituent stocks (in both cash as well as futures segments), thereby either aggressively attempting to push up or support the price rise in the stocks,' stated the Sebi order.
The regulator said trying to 'engineer the closing of the market on expiry day in a manner that benefits enormous index option positions that they may be running to expiry... would prima facie be in violation of PFUTP regulations'.
As per the Sebi order, between January 2023 and March 2025, Jane Street earned ₹44,358 crore in options, lost ₹7,208 crore in stock futures, lost ₹191 crore in index futures, and another ₹288 crore in cash—pocketing an overall gain of ₹36,671 crore during this period.
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