The Jane Street scandal may have unearthed more than what SEBI has uncovered so far, with the market regulator barring the US-based high-frequency trading company from Dalal Street this week, citing suspected market manipulation. According to sources, the scandal flourished during the tenure of Madhabi Puri Buch, who stepped down as SEBI Chairperson in February after a three-year term. Meanwhile, Jane Street is understood to be planning to contest the SEBI ban.
Buch’s term—from March 2022 to February 2025—carried big promises to crack down on speculation while protecting small investors. However, the Jane Street scandal is the latest to underscore the regulatory failures during her regime.
Although many experts are placing faith in incumbent SEBI Chairman Tuhin Kanta Pandey, some say a key challenge for him will be undoing the damage caused by his predecessor. This week, market participants witnessed SEBI’s prompt and precise action against Jane Street—a bold move taken within the first six months of Pandey’s term. It is a step that could go a long way in restoring the credibility and accountability that SEBI lost under Buch.
When Buch-led SEBI Missed Signals
In 2022, Buch took office with promises of reform, emphasising AI-based surveillance and market integrity. However, her tenure is now under scrutiny due to the Jane Street scandal, where the US-based trading firm allegedly manipulated Dalal Street indices on at least 21 occasions between January 2023 and May 2025.
Using a “pump and dump” strategy, Jane Street is estimated to have made illicit gains of around Rs 4,843 crore, harming retail investors who were misled into risky derivatives trades.
Despite early warnings—including a US court revelation and media reports in 2024—SEBI failed to act. Even when the NSE flagged concerns in early 2025, Buch’s regime remained inactive. Her much-touted tech systems failed to detect the manipulation, revealing a significant regulatory lapse.
Critics accused her of favouring optics over substance—overregulating smaller players while ignoring threats posed by large quant funds like Jane Street. Her credibility as a reformer has been severely undermined, amid widespread criticism over missed red flags, potential conflicts of interest, and a reactive, ineffective regulatory approach.
The Jane Street scandal didn’t come out of the blue
There were clear signs that the Buch administration ignored NSE’s concerns regarding Jane Street in February 2025, despite a US district court order in April 2024 strongly criticising the firm.
As early as April 2024, a US District Court in Manhattan reportedly revealed Jane Street’s confession to earning $1 billion annually from Indian capital markets through predatory strategies.
SEBI’s much-vaunted AI and surveillance systems—touted as game-changers—proved ineffective.
While these systems failed to detect Jane Street’s sophisticated manipulations, they enabled a global quant fund to extract billions from Indian markets while retail investors bore the losses, sources said.
Last month, some sections of the media also 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 US courtroom revelations were a glaring wake-up call.
When the Buch administration also ignored NSE’s concerns, it reflected a callous attitude toward a matter of national financial importance.
Such inaction demands a serious inquiry into how Buch’s SEBI missed what is now being called one of the biggest financial scandals in India’s market history.
