MUMBAI: The Securities Appellate Tribunal (SAT) has directed the markets watchdog Securities and Exchange Board of India (Sebi) not to press for a personal hearing, scheduled for next Monday of Jan Street till it hears the matter on November 18.The direction came on a petition from the New York algo trading giant.
Jane Street was banned and fined by the regulator in an interim ex-parte order on July 4 for alleged manipulation of the market, especially on expiry days, seeking a direction from the tribunal to Sebi to share all the relevant documents based on which it had issued the interim order, which also penailised the company to the tune of Rs 48,43.5 crore.
Though the ban was lifted upon depositing the penal amount in an escrow account, Jane Street laywer Darium Khambatta told the tribunal on Tuesday that the company has not resumed trading, despite being eligible for the same.
Jane Street had moved the SAT on September 3,-- exactly two months after the regulatory action seeking to direct the Sebi to part with the some documents which has refused on the ground that the company has no legal rights to do so as no final order has been issued against it nor a show cause notice has been issued.“We have no problem if you challenge our interim order and seek to quash it, but under no extant laws you have any rights to do this roving fishing expedition seeking all probe documents, that too after we sharing 10 GB of data pertaining to the probe, which is still underway.
Even in criminal laws, only after a charge sheet if filed the affected party is entitled for the charge sheet and the probe report,” Gaurav Joshi, the senior advocate representing the Sebi said. Earlier during the hearing, opening the arguments, Khambatta sought to discredit Sebi saying that the regulator had relied on a petty complaint by a UAE based hedge fund to discredit its own and that of NSE’s reports which found no case of market manipulation against his client.
“What was the teething hurry to flip its own internal reports and that of NSE’s too and rely on just one petition? Why is Sebi denying us basic justice by refusing to share probe reports with us so that we are prepared to reply to all their questions when we meet them in person?” he asked. To this Joshi said, “there is no way that we will share our initial probe report with you as you are not eligible for the same.
Come and explain your trading strategy to us in person on September 15, then we can think about appropriate action on your request and also think about revoking our previous actions against your client. Just explain to us how you were trading in the manner you were doing. ”To this the tribunal asked Sebi to file a reply as to why it cannot share any more documents with Jane Street.
Sebi sought three weeks to file the reply citing reasons for not sharing any more information with the US firm, which the tribunal accepted and then said, “till the matter is heard next time, which is November 18, Sebi will not press for a personal hearing from the petitioner.”
The Securities and Exchange Board had on July 3 temporarily barred Jane Street from trading for alleged manipulation of indices, primarily the Bank Nifty on expiry days. Accusing Sebi of refusing to allow full inspection of all relevant and relied upon material, it said while it was inspecting some of the documents the Sebi had relied on to issue the interim order by the whole time member Ananth Narayan G, it came across an internal surveillance report of Sebi in December 2024 that had been unable to conclude manipulation by Jane Street entities in the two key indexes.
One of the key contentions of Jane Street is that Sebi’s own integrated surveillance department (ISD) and the National Stock Exchange (NSE) had previously concluded there was no manipulation, and in spite of these findings, the Sebi had formed a new team and reversed its stance without explanation, according to a Reuters report. In its appeal, Jane Street said, “the impugned orders have been issued in gross derogation of the provisions of the Sebi Act and of the ratio of numerous judgments of various courts, including the Supreme Court, the Bombay High Court, and the tribunal itself.
The impugned orders have been passed by the respondent in complete contravention of the well-settled principles of equity, justice, and good conscience,” the agency report said. In its interim order issued on July 3, Sebi had alleged that Jane Street made huge profits by manipulating the key indices and imposed severe restrictions, including a demand to deposit over Rs 4,843.5 crore of the Rs 36,503 crore net profit it had made in just 21 days of trades from January 2023 to May 2025, in an escrow account as this was the illicit gains from manipulation.
Jane Street complied with the order and deposited the money on July 14. In the interim order, Sebi had said Jane Street and its four related entities took positions in stocks underlying in the Bank Nifty index early in a trading session, while taking short positions in options linked to the index. It later sold the underlying stocks, making a loss on its cash positions, but made far larger gains on its derivative positions.
Sebi’s probe has found the New York based algo trader had made a killing by manipulating Bank Nifty on expiry days. Between January 2023 and March 2025, just by gaming the market on 21 trading days it made a whopping Rs 36,503 crore of net profit by pumping up Bank Nifty component stocks in the morning and to ramp up volume and then dumping them at lower prices in the afternoon trades.