Sebi Chairman Tuhin Kanta Pandey has declared a zero-tolerance policy towards market manipulation, emphasizing increased surveillance and strict action against offenders. This announcement follows an interim order against Jane Street, a New York-based hedge fund manager, for allegedly manipulating stock indices.
Pandey, speaking to reporters on Saturday July 5th, 2025, a day after the order against Jane Street, stated that surveillance has been increased at both the regulatory and exchange levels. When questioned about similar patterns involving other Foreign Portfolio Investors (FPIs), Pandey reiterated that market manipulation would not be tolerated. He made these remarks on the sidelines of an event organized by the Bombay Chartered Accountants Society.
The Securities and Exchange Board of India (SEBI) accused Jane Street of manipulating the Nifty and Bank Nifty indices through sophisticated trading strategies around expiry days, which misled retail investors. SEBI's interim order reveals that the regulator has frozen ₹4,840 crore identified as profits earned through the alleged market misconduct and has imposed trading bans on four Jane Street entities.
According to SEBI, Jane Street's manipulative activities involved driving the Bank Nifty index higher in the morning session and then sharply pulling it down in the afternoon. This orchestrated volatility allowed the firm to profit from bearish options positions, while other traders were misled by the dramatic swings in the index.
SEBI had previously sent a cautionary notice to Jane Street in February 2025, via the NSE, urging the firm to cease deploying such trading strategies. However, Jane Street disregarded the warning and continued similar trades, which was a significant factor in SEBI's decision to impose a ban.
The 105-page interim order released by SEBI provides a detailed account of Jane Street's alleged manipulative practices. The regulator's action against Jane Street and the strong stance against market manipulation reflect its commitment to maintaining market integrity and protecting investors.
