Jane Street saga shakes investors' confidence

Regulator widening probe to protect retail traders from more losses

- BENN KOCHUVEEDAN

THE Wall Street proprietary trading giant with a presence in over a dozen markets across the world, Jane Street has finally came under Sebi's lens for manipulating the derivatives markets. This is a big dampener for investors' confidence in the market.

The company has pocketed over a fifth of its net income of $20.5 billion from the Indian markets just by manipulating prices of 12-stock Bank Nifty. It lured the gullible retail investors into lapping up those stocks/derivatives they were gaming, and once the prices reached their targets it dumped them like hot coal.

As per Sebi's initial assessment, JS Group entities have pocketed 36,502 crore by this pumping and dumping strategy between January 1, 2023 and March 31, 2025, just from manipulating three (HDFC Bank, ICICI Bank and Kotak Bank, which constitute about 65% of the sectoral index weighting) of the 12 Bank Nifty stocks - in just 21 trading days and ₹735 crore in one day on January 17, 2024. In an interim order by Sebi whole-time member Anantha Narayan G, the regulator banned these entities from the market as well as ordered impounding of 4,843.5 crore of their illicit gains, which it hopes to recover from their ₹15,000 crore of Gsecs holding as from July 1. The regulator has restricted a trader's carry forward derivatives positions to just about 1,500 crore.