Last Updated:July 08, 2025, 16:16 IST
‘Sebi was seized of the matter right from April 2024 and took numerous steps to investigate extremely complex structures and verify the data before issuing its order,’ says Buch.
Ex-SEBI chief Madhabi Puri Buch.
Sebi former chairperson Madhabi Puri Buch has rejected allegations that the market regulator acted too late in the Jane Street market manipulation case. In a press statement on July 8, Buch said Sebi had begun its investigation more than a year before its July 3 interim order, and blamed parts of the media for creating a “false narrative” of regulatory failure.
“It is extremely unfortunate that certain sections of the media are choosing to ignore these facts in plain sight and seeking to create a false narrative by implying that there was regulatory failure by Sebi,” Buch said in her statement. “The order passed by Sebi speaks for itself.”
The 105-page interim order accused global quantitative trading firm Jane Street of expiry-day manipulation in index derivatives, and barred the firm and its Indian arm, JSI Investment Pvt Ltd, from accessing Indian securities markets. It also directed them to disgorge Rs 4,840 crore ($560 million) in alleged unlawful gains.
Sebi Started Probe in April 2024
Buch explained that Sebi’s investigation began in April 2024, with a multi-disciplinary team tasked with examining Jane Street’s complex trading structures. She noted that between April 2024 and February 2025, Sebi identified potential index manipulation, issued policy circulars, and even directed the National Stock Exchange (NSE) to send a cease-and-desist letter to Jane Street in February 2025 — well ahead of the public action.
“This is not a case of inaction,” Buch asserted. “Sebi was seized of the matter right from April 2024 and took numerous steps to investigate extremely complex structures and verify the data before issuing its order.”
She added that “the interim order… has clearly documented the sequence of events” and challenged narrative of Sebi as reactive rather than proactive.
What Is the Jane Street Case?
The Securities and Exchange Board of India (Sebi) on July 4, 2025, barred the Jane Street Group, a global proprietary trading firm, from participating in Indian securities markets. The regulatory action comes after an extensive investigation into alleged manipulation of the Indian stock market through index derivatives, particularly Bank Nifty options, which earned the company massive profits of over Rs 36,500 crore between January 2023 and March 2025.
Founded in 2000, Jane Street is a US-based leading global trading firm that operates as a proprietary trading company. Unlike hedge funds, Jane Street trades using its own capital. It has operations across the US, Europe, and Asia, specialising in high-frequency trading and algorithmic strategies. The firm has over 2,600 employees and is known for its sophisticated quantitative models and automated market-making systems.
In India, it operated through four firms — JSI Investments Pvt Ltd, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading Ltd.
How Did Jane Street Earn Rs 36,500 Crore By Allegedly Tricking Indian Stock Markets?
Between January 2023 and March 2025, Jane Street entities made over Rs 43,289 crore in profits from index options, particularly Bank Nifty (BANKNIFTY) using various strategies that allegedly manipulated markets. These profits were partly offset by losses in other segments like stock futures and cash equity, resulting in a net gain of Rs 36,502 crore.
In a 105-page order, Sebi highlighted two key manipulative strategies — ‘Intraday Index Manipulation Strategy’ and ‘Extended Marking the Close Strategy’.
1. Intraday Index Manipulation Strategy
Citing an example of January 17, 2024, when Jane Street made its biggest single-day profit of Rs 734.93 crore, Sebi said Jane Street aggressively bought stocks in the Bank Nifty index (like ICICI Bank, Axis Bank, HDFC Bank) in the cash and futures markets in the morning session. This artificially pushed the index higher. Simultaneously, it built large short positions in Bank Nifty options by selling call options at inflated premiums, and buying put options at lower prices.
Later in the day, Jane Street sold off those same stocks, causing the index to drop. This boosted the value of their put options and rendered call options worthless, ensuring massive profits.
2. Extended Marking the Close Strategy
On certain expiry days, Jane Street allegedly manipulated prices in the last two hours or near the market close, a crucial window for settling F&O contracts.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously asso…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously asso… Read More
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