Jane Street Plans to Contest SEBI Market Manipulation Ban, $567M Fund Seizure

Jane Street, a major US trading firm, is set to challenge India's Securities and Exchange Board (SEBI) over allegations of market manipulation involving the Bank Nifty index and related derivatives. SEBI has barred Jane Street from trading in Indian markets and ordered the forfeiture of approximately $567 million in alleged unlawful gains, accusing the firm of artificially supporting the index while taking short positions in options. Jane Street's management expressed deep disappointment and called the accusations "extremely inflammatory," asserting their trading was basic arbitrage and denying ignoring any warnings from local exchanges. The company lamented the damage to its reputation and criticized SEBI's metrics as disconnected from actual market dynamics, while also highlighting failed efforts to communicate with the regulator since February. SEBI's chairman emphasized that the case highlights surveillance shortcomings and announced plans to enhance monitoring systems amid an expanded probe into other indexes and exchanges. The dispute traces partly to Jane Street's prior lawsuit against Millennium Management, which brought increased scrutiny to its India-related trades.