How did US trader Jane Street allegedly cheat Indian markets to make ₹36,500 crore
What is Jane Street and how big is it?
Jane Street is a global proprietary trading firm founded in 2000. It has more than 3,000 employees and offices across the US, Europe, and Asia. The firm operates in 45 countries. Its footprint in Asia is growing rapidly, especially in Hong Kong.
According to a Reuters report, Jane Street had an annual revenue of $20.5 billion last year.
Jane Street's operations in India
According to SEBI, Jane Street's trading activity in India has been substantial. Between January 2023 and March 2025, it earned nearly $5 billion (about ₹36,671 crore) through index options trading.
Out of this, ₹4,843 crore is now under investigation as unlawful gains.
Jane Street first drew wider attention in India in 2023 when it sued a rival hedge fund, Millennium Management, in a US court. The case revealed that Jane Street had developed a profitable India-based options trading strategy, which earned it $1 billion in 2023 alone. The two firms settled the dispute later that year.
Apart from that, media reports in April 2024 raised concerns about Jane Street's use of proprietary trading strategies in India.
After which, the regulatory body examined the firm's trading behaviour, and subsequently issued a detailed interim order in July 2025.
What did SEBI investigation revealed?
SEBI's interim order outlines serious allegations. Jane Street is accused of manipulating index levels—especially the Nifty and Bank Nifty—on 21 different expiry days between January 2023 and May 2025, reported news agency PTI.
In SEBI's report, two main strategies were flagged:
Morning pump, afternoon dump: Jane Street allegedly bought large quantities of Bank Nifty stocks and futures early in the day, pushing the index higher. Later, it sold off these positions aggressively, depressing the index by closing time.
According to the SEBI, this strategy gave a false impression of market strength, misleading other traders—particularly retail investors—into believing the index was genuinely rising.
Expiry day index manipulation: The firm also reportedly executed large, targeted trades in the final hours of expiry days to influence index closing levels, thus affecting options pricing.
These actions allowed Jane Street to make large profits in the options market, while the smaller losses it took in cash and futures trades were more than offset by gains from index options.
SEBI's findings show Jane Street made:
₹ 44,358 crore in index options gains
44,358 crore in index options gains ₹ 7,208 crore in losses from stock futures
7,208 crore in losses from stock futures ₹ 191 crore in losses from index futures
191 crore in losses from index futures
₹ 288 crore in cash market losses
This resulted in a net profit of ₹36,671 crore, out of which ₹4,843 crore is considered illegal by the regulator and has been ordered to be disgorged.
As a result, SEBI has barred four Jane Street-linked entities from accessing the securities market:
JSI Investments
JSI2 Investments Pvt Ltd
Jane Street Singapore Pte Ltd
Jane Street Asia Trading
Calling Jane Street's actions a 'clear disregard' of regulatory warnings, SEBI has prohibited the Group from buying, selling, or dealing in securities, either directly or indirectly, until the manipulation probe concludes.
Banks holding accounts of these entities have been told to freeze withdrawals unless SEBI allows it.
SEBI further noted that the Jane Street Group kept doing questionable trades, especially near market closing on expiry days. It made large and aggressive moves to unfairly move the index, even after getting a warning in February and assuring the NSE that it would stop such actions.
In its order, SEBI said: 'Such egregious behaviour, in clear disregard/ defiance of the explicit advisory issued to them by NSE in February 2025, amply demonstrates that unlike the vast majority of Foreign Portfolio Investors and other market participants, JS Group is not a good faith actor that can be, or deserves to be, trusted.'
(With Reuters, PTI inputs)
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