Former Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch has strongly refuted claims of regulatory failure in the ongoing Jane Street case, asserting that the investigation into the matter was initiated and actions were taken during her tenure. Buch, the first woman to head SEBI, emphasized that the regulator was actively investigating the alleged market manipulation by the U.S.-based trading firm Jane Street, beginning in April 2024.

The controversy surrounding Jane Street involves accusations of manipulative trading strategies that allegedly led to unlawful profits in the Indian stock market. SEBI has accused Jane Street of running a "well-planned and sinister scheme" to distort Indian markets. The regulator barred Jane Street from trading in India and ordered the firm to return over $550 million (₹4,840 crore) of what it described as illegal profit. This action followed allegations that Jane Street manipulated Indian bank stocks in ways that triggered large payouts on connected derivatives.

In a written statement, Buch highlighted the chronology of events documented in SEBI's interim order against Jane Street to support her claim that the regulator was proactive in addressing the issue. She described attempts to portray the situation as a "false narrative of regulatory failure" as "unfortunate".

The Jane Street case has its roots in a lawsuit the firm filed against Millennium Management and two former traders who allegedly stole a valuable strategy centered on Indian options. SEBI's investigation focused on Jane Street's trades linked to the BANKNIFTY index, which tracks India's major banking stocks. The regulator alleges that Jane Street bought large quantities of constituents in the Bank Nifty index in the cash and futures markets to artificially support the index in morning trade, while simultaneously building large short positions in index options.

Jane Street is contesting SEBI's charges, arguing that its trades were "basic arbitrage trading," a normal practice in the business. The firm insists that it worked with local exchanges and plans to fight the ban within the stipulated 21-day period. In a memo to its staff, Jane Street expressed disappointment with SEBI's "extremely inflammatory" accusations and said the regulator used a metric for market impact and trading aggressiveness "disconnected from actual market dynamics". The company also stated that when exchanges first raised concerns, it "immediately turned off its trading until we could better understand the exchanges' concerns" and later changed its approach to meet their "preferences".

The case has prompted SEBI and stock exchanges to intensify scrutiny of the trading strategies employed by global high-frequency trading (HFT) and quantitative (quant) firms. The controversy has exposed vulnerabilities in the existing oversight mechanisms and highlighted the complexity of monitoring sophisticated trading strategies.

According to recent data, Indian retail investors have suffered substantial losses in derivatives trading, with losses of Rs 1.05 lakh crore in FY25. This revelation has coincided with SEBI's investigation into Jane Street's alleged market manipulation activities, with accusations of generating Rs 36,500 crore in profits through illicit practices.

The situation has sparked debate about the efficacy of SEBI's regulatory framework and the potential impact of such incidents on investor confidence. While some perceive the Jane Street scandal as indicative of regulatory failure during Madhabi Puri Buch's tenure, Buch maintains that SEBI was actively addressing the matter and that attempts to create a false narrative are unfounded.

Madhabi Puri Buch's tenure as SEBI chairperson, which began on March 1, 2022, and ended in February 2025, was marked by significant reforms and enhanced organizational efficiency. She was the first woman and the first person from the private sector to lead SEBI.