New Delhi: The recent stock market scandal involving New York-headquartered trading major Jane Street Group has unearthed more matter than that of SEBI’s investigation thus far. As per media sources, the Jane Street scandal flourished during the tenure of ex-SEBI chief Madhabi Puri Buch, who steppd down completing her tenure on February 28, 2025.
SEBI, acting against manipulative trading activities in the matter related to Jane Street passed an interim order to ban it from the Indian stock market. Meanwhile, Jane Street is learned to be planning to contest the SEBI ban.
Buch’s three-year term starting from March 2022 to February 2025 was big on promises to crack down on speculation while protecting small investors. The Jane Street scandal is the latest one challenging Buch’s promises, underline failures during her regime.
Although many experts are banking on incumbent SEBI Chairman Tuhin Kanta Pandey’s term, some say that one of the key challenges for the head of the country’s market watchdog will be reversing some of the negligent damages caused by his predecessor. This week, market participants witnessed SEBI’s prompt and precise action against Jane Street–a bold move that falls well within the first six months of Pandey’s term, a step that may go a long way in restoring and maintaining some of SEBI’s credibility and accountability lost during Buch’s term.
When Buch-led SEBI missed signals
When Buch was handed over the helm of affairs in 2022, she came up with big promises of reform, AI-based surveillance and market integrity. However, all the tall promises that the former Sebi chief made during her tenure is now under fire due –Jane Street scandal –being at the limelight now where the trading firm allegedly manipulated Dalal Street indices on at least 21 occasions between January 2023 and May 2025.
Despite early warnings–including a US court revelation and media reports in 2024–SEBI failed to act. Even when the NSE raised concerns in early 2025, Buch’s regime remained inactive. Her touted tech systems failed to detect the manipulation, exposing a major regulatory lapse.
Critics have accused Buch of favouring optics over substance, overregulating smaller players while ignoring the threats posed by large quant funds like Jane Street.
Her credibility as a reformer has been severely undermined, with widespread criticism over missed red flags, possible conflicts of interest, and a reactive, ineffective regulatory approach.
Jane Street scandal didn’t come out of the blue
There were clear signals of the Buch administration ignoring NSE’s concerns regarding the Jane Street in February 2025 following a US district court order lambasting the company in April 2024.
As early as April 2024, a US District Court in Manhattan reportedly revealed Jane Street’s confession to earning $1 billion annually from India’s markets through its predatory strategies. Last month, some sections of media highlighted how Jane Street and Millennium Management allegedly exploited market inefficiencies to scalp retail wealth. With over 90 per cent of retail investors losing money in a derivatives market where daily volumes had skyrocketed to unprecedented levels, the courtroom drama in the US was a glaring wake-up call. When the Buch administration ignored NSE’s concerns also, it showed its callous attitude about a matter of importance.
Such inaction demands a look into how the Buch administration missed one of the biggest scandals in India’s financial history. SEBI’s much-vaunted AI and high-tech surveillance systems, coined game-changers, proved utterly ineffective. While these systems failed to detect Jane Street’s sophisticated manipulations, they allowed a global quant fund to drain billions from India’s markets while retail investors bore the brunt, according to media sources.
Tuhin Kanta Pandey On Ban On Jane Street
Meanwhile current Sebi Chairman Tuhin Kanta Pandey, on being recently asked whether there is a need to have more regulations to act against such entities, quipped that the need was for enforcement and surveillance rather than more regulations, and the “order in the Jane Street case speaks for itself.” He highlighted that a great deal of analytical work went into the Jane Street case, as manipulative activities were done in many ways.
Jane Street Scandal That Rocked Stock Market
Jane Street is a proprietary trading firm, which means it trades with its own capital rather than managing client funds. The firm allegedly made a staggering Rs 32,681 crore in profits by manipulating the stock market and repatriating the amount overseas.
Jane Street is understood to have used an extended ‘marking the close’ strategy — placing large and aggressive buy or sell orders near the end of the trading session, with the intention of artificially driving up the closing price of a stock or index. It later dumped these stocks with aggressive selling to rake in a quick profit, which caused the price to crash and losses to those holding the stocks.
Leave a Reply