SEBI Cracks Down on Jane Street: SEBI RA Explains How They Rigged The Market And Made Crores

The Securities and Exchange Board of India (SEBI) has imposed a ban on Jane Street Group and its affiliated entities, prohibiting them from participating in the Indian securities market due to alleged large-scale market manipulation. 

SEBI’s investigation revealed that Jane Street engaged in a coordinated scheme that manipulated index derivatives between January 2023 and March 2025. 

SEBI-registered analyst Nikhil Gangil breaks down what really happened here:

Price manipulation via options 

According to SEBI, Jane Street took massive bearish positions by acquiring put options, effectively betting that the market would decline. 

Deliberate cash dumping 

The firm then executed large, aggressive trades in the cash market, offloading substantial quantities of stocks, which triggered sharp declines in index prices. 

Profits from the fall

By instigating these price reductions, Jane Street ensured that the value of its put options surged, resulting in huge profits. These transactions were timed, frequently focused around the expiration periods of derivatives contracts, where even minor fluctuations could result in substantial gains.

Following its investigation, SEBI has ruled that this was a case of market manipulation and issued an interim order to seize over ₹4,840 crore in alleged illegal gains from Jane Street. 

Impact on retail investors

Gangil highlighted that this crackdown has raised concerns because it's the retail investors who have suffered losses due to the manipulated market movements. Even as the government stands to recover the penalty amount, retail participants may not receive any compensation.

While SEBI’s action serves as a warning for global funds with unlimited capital and ultra-fast execution, Gangil noted that they may continue to try to bend the rules just enough to stay undetected until they are caught. 

He concluded that the biggest takeaway from this is to stop chasing shortcuts or speculating, but invest with informed decisions and stay disciplined. Because over time, investing is the only real way to create wealth. 

Capital market stocks have witnessed heavy selling pressure on Friday. Angel One shares fell 6%, Nuvama fell 5%, while BSE, IIFL Capital, and CDSL shares fell between 4% to 2%.

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