Jane Street vs Sebi: SAT hearing begins today in market manipulation case

The Securities Appellate Tribunal begins hearing Jane Street's challenge to Sebi's July order amid claims of withheld documents and unfair trading ban

The big picture

A three-judge bench of the Securities Appellate Tribunal (SAT), led by Justice P S Dinesh Kumar, will begin hearings today (September 9) in a case filed by US-based trading firm Jane Street Group LLC against India’s market regulator, Sebi. The hearing follows a high-stakes interim order issued in July that accused the firm of market manipulation and barred it from trading in India.

What’s happening today

• The SAT will decide whether to admit Jane Street’s appeal challenging Sebi’s interim order.
• The firm argues it was denied access to key documents necessary to mount a proper defence.
• Jane Street is also expected to seek a pause in the ongoing investigation, depending on how the tribunal views Sebi’s actions so far.

Why it matters

• The case could set a precedent for other global trading firms operating in India, including Jump Trading, Citadel Securities, and IMC Trading.
• Experts say SAT may grant interim relief directing Sebi to respond to Jane Street’s appeal, but the focus remains on whether an interim stay on the Sebi order will be issued.

Sebi’s charges against Jane Street

• Sebi accused the firm of manipulating the Nifty Bank index by buying constituent stocks in both cash and futures markets to artificially push up the index.
• The firm allegedly then unwound positions while holding large short bets in index options — profiting from the drop it helped create.
• Sebi’s July 3 order barred Jane Street from trading and directed the impounding of ₹4,840 crore as alleged illegal gains.

Jane Street’s defence

Jane Street has called the allegations “fundamentally mistaken”, maintaining that its trades were part of standard index arbitrage activity. 

 

 

The firm is demanding access to:

• Emails between Sebi and hedge fund manager Mayank Bansal, who reportedly tipped off the regulator.
• Communications between Sebi and the National Stock Exchange of India (NSE).
• It claims these were withheld due to being labelled “irrelevant”, despite NSE and Sebi having reportedly found no wrongdoing in earlier reviews of Jane Street’s trading activity.

Timeline: The story so far

• July 3: Sebi issues interim order banning Jane Street from markets, freezing accounts, and directing fund impounding.
• July 18: Ban lifted after Jane Street deposits ₹4,844 crore in escrow. The firm, however, hasn’t resumed index option trading.
• September 3: Jane Street files appeal with SAT, citing denial of access to critical documents.
• September 9: SAT hearing begins, with tribunal to decide on admission of appeal and possible interim relief.