US Trading Firm Jane Street Sues India’s Sebi

India-West News Desk

NEW DELHI – US trading firm Jane Street has filed a case against India’s markets regulator, the Securities and Exchange Board of India (Sebi), claiming it has been denied access to documents crucial to defending itself against allegations of market manipulation.

The appeal was submitted to the Securities Appellate Tribunal (SAT) on September 3, according to Reuters.

In its submission, Jane Street urged the tribunal to direct Sebi to provide the materials it says are essential to rebut the charges, describing the documents as “undeniably relevant” to its defense. Reuters reported that the case comes months after Sebi issued an interim order accusing the firm of manipulating the Nifty Bank index and imposing a temporary trading ban in India on July 3.

Sebi alleged that Jane Street employed a two-step strategy: first, buying constituent stocks in both cash and futures markets to artificially inflate the index, and then unwinding those positions while holding significant short bets in index options to profit from the subsequent decline. Jane Street rejected the claims, insisting its trades were part of standard “index arbitrage,” a practice used to exploit price discrepancies across markets and improve liquidity.

An internal note circulated to employees described Sebi’s findings as “fundamentally mistaken.” The interim ban was lifted on July 18 after Jane Street deposited ₹4,843 crore into an escrow account, the amount Sebi said the firm gained from the contested trades.

Despite the lifting of the ban, Jane Street has not resumed trading in index options and remains under ongoing adjudication proceedings, which could extend for six to eight months. The firm initially had 21 days to respond to Sebi’s order but missed the July 26 deadline. Two days later, it requested an additional six weeks to prepare its defense.