The Securities and Exchange Board of India (SEBI) has recently cracked down on Jane Street, a US based trading giant. The crackdown is to do with alleged manipulation of Indian financial markets and profiting unfairly. The total profit garnered as per the SEBI report is of ₹36,502 crore.
What Jane Street’s alleged rigging means for small investors
SEBI’s interim order against Jane Street clearly reveals how expiry day trades can be engineered to distort and create complexities in index movements. This case highlights the very serious hidden risks retail investors face in the rapidly evolving, fast moving algorithm driven equity markets.
Source: Sebi order link: (Page 10 of the SEBI order)
SEBI has invoked multiple provisions against Jane Street for index manipulation
The SEBI order charges Jan Street Group with the manipulation of equity indices. This has been done under SEBI Act Sections 11(1), 11(4), 11B(1), 11(D) and PFUTP Regulations. PFUTP stands for Prohibition of Fraudulent and Unfair Trade Practices. These provisions are discussed in order.
What retail investors can learn from the Jane Street episode
Hence, as the case continues to unfold, here are five key takeaways for retail investors:
1. Big players can influence the market — Stay informed: Jane Street’s alleged ‘pump and dump’ tactics on expiry days showcase how easily large trades distort market levels. Retail investors and traders must take note of this fact that indices may not always show a clear reflection of genuine market sentiment, even more so during high volatility periods such as derivatives expiry.
2. Don’t blindly follow index movements: SEBI noted that Jane Street’s actions gave a misleading and false sense of bullishness in Nifty50 and Bank Nifty. This highlights the need for retail investors to avoid impulsive trades based on sudden index fluctuations and instead use technical indicators or volume data to carefully check and validate trends.
3. Understand how expiry day manipulation works: The alleged rigging involved large scale strategic buying and selling to move index levels on expiry days, thus influencing option prices. That is why if you trade options be extremely cautious around expiry. Sudden moves may not be driven by fundamental market strength but by large institutional strategies.
4. Watch for SEBI advisories and warnings: Earlier SEBI had already warned Jane Street in February 2025. As a prudent retail investor in this case you should always keep an eye on such regulatory red flags. SEBI’s website, circulars, notices, along with financial news can all cumulatively offer early warning signs about irregular market behaviour or risk in the equity markets. That is why consistent monitoring, reading and building knowledge is the best way to keep yourself safe in such an environment.
5. Regulators do act — But vigilance is key: This case highlights SEBI’s increasing scrutiny of foreign entities along with the complex strategies deployed by them to make money in the Indian equity market. Given regulators act in sincere public interest, the onus is on investors to stay cautious, avoid FOMO i.e.,the fear of missing out, keep themselves away from greedy F&O trades and prioritise risk management to successfully navigate the complexities of the equity markets.
Hence, the Jane Street case is a strong wake-up call for retail investors in the country who are busy with emotion based short term trading. Do keep this fact in mind, that in today’s data-driven markets, knowledge, patience, and discipline matter more than chasing quick profits.
Disclaimer: The views expressed in this article are for informational purposes only and do not constitute financial or investment advice. Readers are advised to consult with a certified financial advisor before making any investment decisions.