Jane Street / American company committed fraud in the stock market, defrauded Rs 36,500 crore

Jane Street: The Securities and Exchange Board of India (SEBI) has imposed an interim ban on American high-frequency trading company Jane Street. The company is accused of making illegal earnings of Rs 36,500 crore from the Indian stock market by manipulating Dalal Street. SEBI has issued an order to confiscate the company's illegal earnings of Rs 4,843 crore during the investigation. If the allegations are proved in the investigation, a permanent ban can be imposed on the company. Let us understand this whole matter in detail and know how Jane Street committed such a big scam.

What is Jane Street?

Jane Street is an American high-frequency trading (HFT) company, which buys and sells stocks in a fraction of a second. This company trades in global markets using its cutting-edge technology and algorithms. In India, it caused huge losses to investors and manipulated the market through futures and options (F&O) trading.

Modus operandi

Jane Street carried out the scam using two main strategies:

Coordination of futures and options trading

• The company manipulated the market by coordinating between the cash market and the F&O segment. For example, suppose a stock is trading at Rs 1,200. Jane Street manipulated the market in the following manner:
• The company bought 10,000 lots of futures at Rs 1,202.
• Also, it bought a call option of Rs 1,220 of 10,000 lots at Rs 3.
• After this, it raised the price of the same stock by investing Rs 50 crore in the cash market.
• When the stock price reached Rs 1,320, it made a profit of Rs 73.75 crore from futures and Rs 60.62 crore from options.
• Thus, on an investment of Rs 50 crore, the company earned more than Rs 134 crore.

Expiry Day Manipulation

Jane Street followed a specific pattern between January 2023 and March 2025, especially on the expiry dates of Nifty and Bank Nifty. Its strategy was as follows:

In the morning, the company bought stocks and futures in large quantities.

After this, it sold the stocks in the afternoon by creating short positions in options, which caused the index to go down and made huge profits from options trading.

Many times, the company bought Nifty-linked stocks in the last two hours and created long positions in options. This caused the index to go up and the options were sold at a profit.

Sebi action

• SEBI considered these activities of Jane Street as part of market manipulation and took the following action against the company:
• Interim ban: The trading activities of the company were immediately stopped.
• Seizure order: SEBI ordered the seizure of illegal earnings of Rs 4,843 crore.
• Investigation ordered: SEBI has initiated an in-depth investigation into the matter, following which a permanent ban may be imposed on the company.