In an unprecedented move, the Securities and Exchange Board of India (SEBI) has imposed its highest-ever penalty, ordering Jane Street Group to pay ₹4,843.57 crore for its alleged involvement in large-scale index options manipulation in the Indian stock market.
The interim order, issued on Wednesday, comes after an extensive investigation that uncovered what SEBI described as a "deliberate and coordinated attempt to rig the market" by taking advantage of expiry-day volatility in major indices such as NIFTY and BANKNIFTY.
The regulatory action has been taken against four affiliated companies of the Jane Street Group:
JSI Investments Private Limited
JSI 2 Investments Private Limited
Jane Street Singapore Private Limited
Jane Street Asia Trading Limited
These firms, operating as part of a common trading strategy, have been found guilty of engaging in manipulative and deceptive trading practices to generate extraordinary profits.
The investigation was launched after media reports in April 2024 raised red flags about Jane Street’s unusual trading patterns in the Indian derivatives market. SEBI’s probe confirmed that the group had manipulated index options over a span of 21 trading days, primarily on market expiry days, misleading retail investors and destabilizing the market.
One major instance cited in the order occurred on January 17, 2024, when Jane Street purchased ₹4,370 crore worth of Bank Nifty shares and futures in the opening session, giving a bullish signal. The group then sold off the same positions, causing the index to crash — and made huge profits on put options it had already purchased.
On the same day, the group reportedly took a massive bearish position worth ₹32,115 crore, creating a total short position of ₹46,620 crore, resulting in a profit of ₹735 crore, despite incurring a ₹61.6 crore loss in the cash and futures segments.
SEBI’s order revealed that such strategies, including one internally referred to as 'Strategy B', were executed on NIFTY and BANKNIFTY expiry days, earning illegal profits of ₹225 crore and more in individual sessions.
SEBI also highlighted that Jane Street Group had received a warning from the National Stock Exchange (NSE) in February 2025, cautioning them about irregular trading activity. However, the group continued its manipulative strategies, prompting SEBI to step in with strong regulatory action.
SEBI has directed that the entire amount of ₹4,843.57 crore, earned through illegal means, be recovered jointly and severally from all four implicated companies. The amount is to be deposited into an escrow account maintained by SEBI.