SEBI bars Jane Street for alleged ₹36,500 crore market manipulation in India

The Securities and Exchange Board of India (SEBI) has barred US-based proprietary trading firm Jane Street and its former trader, Nehal Chopra, from participating in the Indian securities market over alleged manipulative trading practices that reportedly led to illegal profits worth ₹36,500 crore. According to SEBI’s interim order issued on July 1, Jane Street India Pvt. Ltd. (JSIPL), Jane Street Asia Pte. Ltd. (JSAPL), and Chopra were involved in what the regulator called a "scheme to defraud" by engaging in synchronized trading strategies that misused market infrastructure and exploited retail investors.

What the Case Is About

The alleged manipulation took place over several months between January 2022 and June 2023. SEBI claims the trading entities executed a series of buy and sell orders between themselves in the derivatives segment, which had no genuine economic rationale but were intended to give a misleading appearance of high trading activity and price discovery. Chopra, who held key decision-making positions in the trading strategy, reportedly used algorithmic trading to orchestrate these trades across different accounts of the group. SEBI said this conduct led to artificial price inflation and volume spikes in various securities, allowing the entities to profit massively.

Profits and Market Disruption

SEBI’s probe revealed that the coordinated trades helped Jane Street and its affiliates net profits upwards of ₹36,500 crore, primarily through the options segment. The watchdog flagged the activities as harmful to fair market practices and detrimental to the interests of ordinary investors. The regulator added that these trades distorted liquidity patterns, misled other market participants, and compromised the integrity of price formation in the derivatives market.

SEBI’s Action

Pending a final investigation, SEBI has prohibited the entities and Chopra from buying, selling, or dealing in Indian securities in any manner, either directly or indirectly. SEBI has also directed them to submit details of their Indian operations and financial gains made through these alleged trades. Jane Street has denied wrongdoing and said it is reviewing the order before taking further steps. Chopra has not issued a public statement yet.

Why It Matters

This is one of the biggest cases of alleged market manipulation in recent Indian regulatory history. It underscores SEBI’s increasing scrutiny of algorithmic trading and high-frequency trading firms, especially foreign entities operating in India’s capital markets.