Jane Street has appealed to India’s Securities Appellate Tribunal (SAT) against market manipulation charges from the Securities and Exchange Board of India (SEBI). The New York-based trading firm says the SEBI blocked access to key documents needed for its defense.
In its appeal, Jane Street asked for full access to surveillance reports and exchange correspondence. It also sought a stay on further regulatory action until the tribunal reviews the case. The firm says the SEBI’s own surveillance team had already reviewed the trades and found no evidence of manipulation.
SEBI Alleges Price Distortion in Bank Nifty Index Options
The dispute began with an order that the SEBI issued on July 3. Regulators accused Jane Street of using its trading, financial and technological strength to distort prices in index options, particularly the Bank Nifty. They claimed the activity aimed to draw retail investors into losing positions. Jane Street rejects the claim and describes the trades as legitimate index arbitrage.
To follow the SEBI’s ruling, Jane Street placed 4,840 crore rupees (about $560 million) into an escrow account. That payment allowed the firm to resume trading after a temporary ban. However, the SEBI has warned that it may still impose penalties, possibly up to three times the alleged gains.
The case shows a rare clash between one of Wall Street’s most powerful proprietary trading houses and a major emerging market regulator. The outcome may set a precedent for other global firms that already operate in India.
In the meantime, the Commodity Futures Trading Commission (CFTC), which regulates the vast U.S. derivatives market, is replacing its decades-old surveillance system with a modern platform from Nasdaq. The upgrade is aimed at strengthening the agency’s ability to detect and prevent market manipulation and fraud.
