US Courts To SEBI — How The Jane Street Saga Has Unfolded Despite A Settlement

The Securities and Exchange Board of India has barred Jane Street Group entities from accessing the Indian securities market and directed the impounding of Rs 4,844 crore in alleged unlawful gains from the group.

According to SEBI’s order, Jane Street earned Rs 43,289 crore in profits through trading in index options on Indian exchanges between Jan. 1, 2023, and March 31, 2025.

The markets regulator passed the order as part of enforcement action. It applies to all Jane Street Group entities operating in India and restricts their ability to trade or participate in any market-related activity.

Here's a timeline of how the Jane Street saga unfolded:

• Jane Street sued two of its former traders in US, alleging that they stole confidential prop trading strategies for new jobs at Millennium Management. This strategy was used for options trading in India, and earned Jane Street $1 billion the previous year.

• In India, SEBI carried out an analysis based on Jane Street dispute for alleged unauthorised use of their proprietary trading strategies in Indian markets.

• The two ex-Jane Street traders countersued the firm, saying they led the growth of the India options trading strategy from a relatively small operation to a highly profitable business.

• A US court gave Jane Street a hard May 23 deadline to provide specifics about the trade secrets it alleged were stolen.

• A US Judge rejected a claim that Jane Street filed its suit in bad faith, and threw out counterclaims.

• Separately in India, NSE was asked by SEBI to examine the trading activity of Jane Street to ascertain if there was any market abuse involved.

• SEBI interacted with Jane Street, which provided its written submission explaining the options trades.

• SEBI separately issued a circular announcing F&O curbs for retail traders.

• NSE submitted an examination report on Jane Street Group’s trading to SEBI.

• Jane Street and Millenium settled their lawsuit in the US. Terms of settlement were not disclosed.

• SEBI observed abnormal volatility on weekly index options on expiry days. It found certain entities running the largest risks in cash equivalent terms in the futures and options segment, particularly on expiry days. A team was constituted to further examine the issue.

• SEBI team noted that Jane Street was engaging in activities that violated unfair trade practice regulations.

• On SEBI’s instructions, NSE issued cautionary letter to Jane Street, advising it to refrain from taking large cash-equivalent positions, and refrain from undertaking certain trading patterns.

• Jane Street subsequently replied to NSE's letter.

• NSE tells Jane Street's India trading partner Nuvama Wealth that the investigation was closed following Jane Street's reply in February, Bloomberg reported.

• Despite NSE's caution letter and Jane Street's reply, the latter was found to continue running very large cash-equivalent positions in index options.

• SEBI released interim order, restrained Jane Street from accessing markets over unlawful gains of Rs 4,843 crore.