Jane Road to contest Indian regulator’s manipulation prices

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Jane Road plans to contest a discovering by India’s monetary regulator that the Wall Road buying and selling agency engaged in “an intentional, properly deliberate, and sinister scheme” to control the nation’s markets. 

On Friday, the Securities and Alternate Board of India banned the US buying and selling agency from dealing securities within the nation, alleging that it had systematically manipulated Indian financial institution shares to set off big payouts on associated derivatives. SEBI additionally ordered Jane Road to return greater than $550mn of “unlawful positive aspects”. 

In a memo despatched to its roughly 3,000 workers on Sunday, Jane Road’s senior administration mentioned that they had been “past disillusioned” by SEBI’s “extraordinarily inflammatory” accusations and had been “engaged on a proper response” to rebut them.

“It’s deeply upsetting to see the agency mischaracterised this manner,” mentioned the memo, a duplicate of which was seen by the Monetary Instances. “We take pleasure within the function we serve in markets all over the world, and it’s painful to have our agency’s status tarnished by a report based mostly on so many inaccurate or unsupported assertions.”

SEBI mentioned final week that Jane Road had 21 days to object to the order and request a listening to.

Jane Road is likely one of the greatest and most profitable of a brand new technology of “proprietary buying and selling companies” which have emerged over the previous 20 years and grow to be massively influential in an array of markets.

The New York-headquartered agency practically doubled its web buying and selling revenues to $20.5bn final 12 months, outpacing a number of of Wall Road’s greatest banks. Within the first quarter of 2025 Jane Road notched up web buying and selling revenues of $7.2bn, greater than Morgan Stanley.

SEBI’s investigation was triggered by revelations from a lawsuit launched by Jane Road final 12 months in opposition to Millennium Administration and two former merchants that had moved to the hedge fund.

Jane Road’s criticism alleged that the merchants had stolen a massively helpful buying and selling technique, which was later revealed to revolve round Indian choices buying and selling.

SEBI’s investigation has thus far centered on Jane Road’s buying and selling in shares, futures and choices tied to the BANKNIFTY index of Indian banking shares, however regulators indicated over the weekend that they had been additionally taking a look at different corners of India’s monetary markets.

Jane Road’s memo to employees mentioned that the Indian regulator had used “a metric for market affect and buying and selling aggressiveness which appears disconnected from precise market dynamics”. It argued that the small print of its buying and selling on January 17, 2024 — one of many days highlighted in SEBI’s report — truly confirmed “primary arbitrage buying and selling”, a typical technique within the business.

Jane Road’s executives had been additionally incensed by SEBI’s assertion that the agency had ignored considerations voiced by native inventory exchanges, which the regulator cited as justification for the sudden and unprecedented ban on the buying and selling agency’s Indian actions.

This allegation “felt particularly removed from actuality”, Jane Road’s memo mentioned. The buying and selling agency mentioned it had on the time instantly turned off its buying and selling “till we may higher perceive the exchanges’ considerations”, after which modified its methods to handle their “preferences”.

“As soon as once more, we left this course of feeling that we had reached an understanding of the considerations and mirrored them in modifications to our buying and selling behaviour,” the memo mentioned. “Since February, we now have made ongoing efforts to speak with SEBI and have been persistently rebuffed.”