Jane Street Fights Back Against India’s Market Manipulation Allegations

One of Wall Street’s biggest trading powerhouses is taking on India’s market cops. Jane Street, the secretive US high-frequency trading firm, has formally appealed a temporary trading ban slapped on it by India’s Securities and Exchange Board (SEBI), saying the regulator stacked the deck by withholding key documents that could clear its name.

In its filing to India’s Securities Appellate Tribunal, Jane Street called SEBI’s July order “untenable” and “flawed.” The firm argues that it was denied access to crucial internal reports — including one from SEBI’s own surveillance team in late 2024 that reportedly failed to find evidence the firm manipulated India’s Bank Nifty index. That report even suggested the matter “may not be pursued further,” according to Jane Street’s appeal.

Yet just months later, SEBI reversed course, accusing Jane Street of running a “sinister scheme” to push around the cash and futures markets while profiting off parallel options bets. The regulator’s 105-page order accused the firm of trading in heavy enough volumes to move the index and misleading retail investors into bad trades.

Jane Street — which made about $4 billion from Indian markets in the past two years — was temporarily banned from trading and ordered to park $560 million in escrow. The restriction was lifted once the money was deposited, but the firm has yet to restart trading in India. If SEBI ultimately proves its case, it can fine Jane Street up to three times the alleged “illegal gains.”

The New York-based firm insists its strategy was nothing more than plain vanilla index arbitrage, the kind of trading it does every day across global markets. In a memo to staff, it said it was “beyond disappointed” by SEBI’s allegations.

The fight has global resonance. Jane Street is one of the most dominant players in modern finance, pulling in a record $10.1 billion in trading revenue last quarter — more than Goldman Sachs or JPMorgan — thanks to volatility stoked by President Trump’s tariff wars. Its skirmish with India’s regulator is being closely watched by other high-frequency traders who’ve piled into India’s booming derivatives market.

For now, Jane Street is asking the tribunal to stop SEBI from taking any further action until the appeal plays out. The regulator hasn’t commented publicly. But the case has already sent a chill through the trading community — a reminder that even the most powerful Wall Street firms can find themselves on the wrong side of regulators in emerging markets.

With input from the Financial Times, Reuters, and Bloomberg.