Why Jane Street, a US trading giant, is in trouble in India

July 17, 2025

India's market regulator Securities and Exchange Board of India (Sebi) has banned New York-based trading giant Jane Street from the securities market, accusing it of manipulating the Bank Nifty index through a "sinister scheme. " According to Sebi, Jane Street operated in both cash and derivatives markets simultaneously, artificially inflating bank share prices early in the day before dumping them at market close to profit from bets on price declines. The firm, which made $4.

Who is affected

Small retail investors in India's derivatives market who traded at "unfavourable and misleading prices"
The approximately 10 million retail investors in India's derivatives market who collectively lost 1.05 trillion rupees ($11.6 billion) in FY25
Individual investors like the unnamed Mumbai-based investor who lost nearly $7,000 in a single day
Jane Street, a major trading firm with 3,000+ employees that operates across 45 countries
The broader Indian stock market and its participants whose trust in market integrity may be affected

What action is being taken

The Securities and Exchange Board of India (Sebi) has banned Jane Street from the Indian securities market
Jane Street has deposited just over $560 million in an escrow account with a lien marked in favor of Sebi
Jane Street is planning to challenge Sebi's order
Sebi is currently examining Jane Street's request to remove the trading ban

Why it matters

The case raises concerns about market manipulation that may have caused significant financial losses to millions of retail investors
It highlights potential regulatory gaps in real-time surveillance of market manipulation
The incident involves a major global trading firm that accounted for over 10% of North America's equity trading volume in 2023
The allegations suggest sophisticated market manipulation techniques that created "a false or misleading appearance of market activity"
According to Sebi, Jane Street's activities threatened "the integrity of the market, and the faith of millions of small investors and traders"

What's next

No explicit next steps stated in the article

Read full article from source: BBC