Market Probe Escalates: Jane Street Moves SAT for full disclosure on Sebi’s Order on Index Manipulation Allegation

US trading firm Jane Street has filed an appeal with the Securities Appellate Tribunal (SAT) seeking full access to investigative records, Mint reported. It reportedly says that the records are essential to defend against a July 3 ex parte interim order from the Securities and Exchange Board of India (SEBI) that accuses the firm of index manipulation.

The move is Jane Street’s first formal legal response to the regulator’s action and asks the tribunal to compel SEBI to hand over documents, raw trading logs and internal analyses that the firm says were withheld.

In its petition, Jane Street says SEBI denied it access to materials generated during earlier probes by the National Stock Exchange (NSE) in November 2024 and by SEBI’s Integrated Surveillance Department (ISD) in December 2024, reports that, Jane Street argues, found no evidence of the manipulation SEBI later alleged.

The firm has asked SAT both for production of the complete ISD report and for interim directions preventing SEBI from taking further steps until it can fully inspect the records.

SEBI Allegations

SEBI’s July 3 interim order barred Jane Street from trading in India and said the firm had, on certain mornings, purchased large volumes of Bank Nifty constituents in cash and futures markets to prop up the index while simultaneously building large short positions in index options that were later exercised or allowed to expire, conduct SEBI described as manipulative and harmful to retail investors.

The regulator gave Jane Street 21 days to respond; the firm says it has cooperated and has deposited the required Rs 4,843.6 crore into escrow.

Jane Street told SAT that both the NSE and SEBI ISD probes examined many of the same dates cited in the July order yet reached different findings. Citing the ISD’s December 11, 2024 analysis, the appeal says that in 48 out of 53 time patches (over 90%) it could not be established that Jane Street’s trading moved constituent or index prices in a way that benefited related derivative positions; the remaining five patches, the firm says, showed negligible profits. The appeal argues SEBI has not explained why a later internal team arrived at an opposite conclusion on substantially the same data.

Documents Sought

Jane Street is asking SAT to direct SEBI to produce: the full ISD report (unredacted); the complete chain of communications with the NSE (including any requests to change earlier analytical criteria); complaint materials that prompted SEBI’s re-examination; and unmasked order and trade-log data that would allow a patch-by-patch verification of SEBI’s theory (including the so-called “Extended Marking the Close” analysis).

The appeal contends that selective disclosure and heavy redactions deny Jane Street a fair opportunity to rebut the charges and violate Supreme Court precedent, which requires relevant investigative material to be disclosed at adjudication except for narrowly reasoned confidentiality exceptions.

Jane Street says it has refrained from fresh purchases while cooperating and has already placed the escrow amount demanded by SEBI.

Stakes & Next Steps

If SAT grants inspection, Jane Street would gain access to the underlying data needed to mount a substantive response at the upcoming whole-time member hearing. If denied, the firm warns it cannot meaningfully contest SEBI’s factual assertions.

Observers say the outcome could shape how Indian market-surveillance disputes balance investigatory secrecy with investor and respondent rights.

SAT’s decision on disclosure and interim protections; SEBI’s reply to the appeal; whether additional enforcement measures follow; and the timing of the substantive hearing that will determine whether the trading bar remains in force.