India's earnings at Jane Street diminished amidst accusations of misconduct

In a surprising turn of events, high-frequency trading firm Jane Street Group has found itself embroiled in a controversy in India. Despite achieving a record $10.1 billion in net trading revenue globally in the second quarter of 2025, surpassing all Wall Street's biggest banks, the firm has been temporarily banned from the Indian securities market.

The ban, imposed by the Securities and Exchange Board of India (SEBI) in an interim order dated July 3, 2025, is a result of allegations of manipulative transactions involving local options and shares by Jane Street Group. The firm, however, has vehemently denied these allegations.

The controversy began in February 2025 when Jane Street Group stopped trading in India following letters received from the National Stock Exchange of India and its rival BSE Ltd. The SEBI's 105-page order, issued later, accused the firm of taking large index options positions in May 2025. However, the order did not provide specific details about the manipulative transactions.

The revenue from India, which previously accounted for more than 10% of Jane Street Group's total revenue in 2024, was projected to be less than half of the $2.3 billion earned in 2024. In 2025, the firm generated approximately 3% of its first-half net trading revenue from India.

Jane Street Group has since filed an appeal in an Indian court to challenge SEBI's allegations. The firm has also requested the court to order SEBI to grant "full and free" inspection of the related materials. The person who is taking legal action in India to contest the allegations of market manipulation raised by the SEBI is not explicitly named in the given search results.

The case has potential implications for other high-frequency trading firms that have moved to India during a retail trading boom in equity options. The allegations against Jane Street Group have gained global attention, creating a conflict between the trading firm and regulators in the largest equity-derivatives market by volume.

Despite the ongoing legal battle, Jane Street Group has not publicly commented on the allegations or the ban since the interim order was issued. The firm continued deploying a weekly "expiry-centric extended marking-the-close strategy" even after being made aware of regulatory red flags, according to sources familiar with the matter.

As the case unfolds, the future of Jane Street Group's operations in India remains uncertain. The firm will undoubtedly be hoping for a swift resolution to the matter, allowing it to resume its trading activities in one of the world's fastest-growing financial markets.