New Delhi, 4 July

Markets regulator Sebi has barred US-based Jane Street Group from the securities markets and directed the group to disgorge unlawful gains of Rs 4,843 crore for allegedly manipulating stock indices through positions taken in derivatives segment.

This could be the highest disgorgement amount ever directed by the Securities and Exchange Board of India (SEBI).

In its interim order, the regulator has debarred JSI Investments, JSI2 Investments Pvt Ltd, Jane Street Singapore Pte Ltd, and Jane Street Asia Trading - entities collectively referred to as the Jane Street Group -- from trading until further notice, while continuing its investigation.

Established in 2000, Jane Street Group LLC is a global proprietary trading firm in the financial services industry. It employs more than 2,600 people across five offices in the US, Europe, and Asia, and conducts trading operations in 45 countries.

The Jane Street (JS) Group has come under Sebi's scrutiny for allegedly manipulating index levels in the stock market to earn illegal profits, primarily through the highly liquid Bank Nifty and Nifty index options segments.

An investigation by Sebi revealed that over 21 expiry days between January 2023 and May 2025, the group executed large trades in the underlying cash and futures markets to influence index movements and profit from massive positions in the options market.

Two key strategies were identified-- one involved buying heavily in Bank Nifty stocks and futures in the morning and selling them aggressively in the afternoon to create a softer close, while the other involved concentrated selling or buying in the last two hours of the expiry day to sway index levels.

These actions helped the group earn illegal profits of about Rs 4,843 crore, even as they incurred smaller losses in cash and futures trades, the regulator said.

Sebi also noted that between January 2023 and March 2025, the JS Group recorded substantial trading activity across various segments of the market. The group made gains of Rs 44,358 crore from index options trading, which formed the bulk of their profits.

However, these were partially offset by losses of Rs 7,208 crore in stock futures, Rs 191 crore in index futures, and Rs 288 crore in the cash market. After accounting for all gains and losses, the JS Group reported a net total profit of Rs 36,671 crore during this period, Sebi noted.

The case stems from media reports in April 2024, which suggested that Jane Street and its related entities may have used unauthorised proprietary trading strategies in the Indian options market.

Sebi noted that the JS Group continued to carry out suspicious trading activities, mainly near market closing on expiry day, by making large and aggressive trades to unfairly influence the index, even after receiving a warning in February and making promises to the NSE to stop such practices.

"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.

"In the face of such a strong prima facie case that allowing the JS Group to continue as before may severely compromise investor protection on an extraordinary scale, Sebi has a duty to directly intervene," Sebi added.

Accordingly, Sebi said, "the total amount of unlawful gains earned by the JS Group from the alleged violations, Rs 4,843.57 crore, shall be impounded jointly and severally."

The entities have been "restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly."

Additionally, banks where the entities are holding accounts have been directed to ensure that no debits are made, without Sebi's permission, except for the purpose of complying with this order.