Illegal gains in the Jane Street scandal may not be limited to Rs 4,843 crore but may actually amount to as high as Rs 1 lakh crore, sources told Zee Business. They also said that the Jane Group’s involvement in alleged market manipulation extends beyond the known four entities, with 3-4 more associated firms under the scanner. The revelation comes days after capital market regulator SEBI cracked its whip on Jane Street, barring the US-based high-frequency trading firm from Dalal Street, accusing the company and its India-incorporated entities of having taken large derivative positions to manipulate indices such as Nifty Bank.

The market watchdog–headed by Tuhin Kanta Pande, who took charge in March after his predecessor left office the previous month–seized $567 million (Rs 4,843 crore) of its funds, saying an investigation found it manipulated stock indices through positions taken in derivatives.

The market watchdog has also alleged that the US firm had bought large quantities of Nifty Bank constituents in the cash and futures markets to artificially support the index in morning trade, while simultaneously building large short positions in index options. Later in the day, Jane Street reversed the trades to profit from options positions, SEBI mentioned in its 105-page order against the US-based group. 

On Monday, Pandey said that there “may not be many more such cases”, without elaborating. He also described SEBI’s intent to enhance its surveillance to scrutinise manipulation in derivatives trading.

Dalal Street houses the world’s largest derivatives market, accounting for nearly 60 per cent of the 7.3 billion equity derivatives traded globally in April, according to the Futures Industry Association.

The surge in derivatives trading–which has also been driven by retail investors–has prompted the Securities and Exchange Board of India (SEBI) to limit the number of contract expiries and increase lot sizes to make such trades more expensive.