SEBI uncovers market manipulation playbook, ₹36,000 Cr scam involved

The recent discovery by the Securities and Exchange Board of India (SEBI) of a market manipulation scheme orchestrated by the US-based trading firm Jane Street and its related entities has raised significant concerns in the financial world. SEBI’s stringent action includes barring these entities from participating in Indian securities markets due to their involvement in index derivatives trading manipulation.

SEBI’s investigation revealed that Jane Street and its associated entities amassed a staggering profit of more than Rs 36,000 crore over the past two years through their trading activities in index options and futures. A closer look at their trades unveiled the illegal gains of Rs 4,843 crore, which are now mandated to be deposited into an escrow account under the supervision of a scheduled commercial bank.

The trading pattern employed by Jane Street, particularly on index expiry days, caught SEBI’s attention. The firm followed a strategy of purchasing substantial amounts of Bank Nifty futures and stocks in the morning while aggressively offloading Bank Nifty options. Subsequently, they would sell off their futures holdings, leading to an impact on the final index closing levels.

For instance, on January 17, 2024, Jane Street executed trades involving the purchase of Bank Nifty futures valued at Rs 4,370 crore, the sale of options worth Rs 32,115 crore, and the later sale of futures amounting to Rs 5,372 crore. These transactions resulted in a significant short position of Rs 46,620 crore in the options market. Despite facing losses of Rs 61.6 crore in futures and cash segments, the firm closed the day with a net gain of Rs 673.4 crore.

On a different occasion, on July 10, 2024, Jane Street repeated similar manipulative activities, creating substantial short positions in both Bank Nifty futures and options. This strategic move enabled them to earn a profit of Rs 225 crore by influencing a softer index closing.

SEBI’s detailed investigation unveiled that the Jane Street group raked in more than Rs 43,000 crore solely from index options trading between January 2023 and March 2025. However, their operations also incurred losses amounting to approximately Rs 7,687 crore in stock futures, index futures, and cash segments.

The evident intention behind these trading maneuvers was not merely profitable gain but also the manipulation of market movements, a violation of fair market guidelines and principles. SEBI’s decision to penalize and restrict Jane Street and its associated entities from further participation in Indian securities markets serves as a strong deterrent against such unethical practices in the future. The financial industry must remain vigilant and uphold integrity to ensure a transparent and fair market environment for all participants.