Jane Street scandal unearths lapses during ex-SEBI chief Madhabi Puri Buch's regime? All you need to know

The Securities and Exchange Board of India (SEBI) has banned US-based high-frequency trading firm Jane Street from participating in Indian markets, citing serious concerns over market manipulation. Sources say this could be one of the biggest scandals to hit Dalal Street in recent years.

The scandal, which reportedly flourished during the tenure of former SEBI Chairperson Madhabi Puri Buch, is raising questions about the regulator’s past leadership. Buch served from March 2022 to February 2025, a period during which she promised strict oversight, use of AI for surveillance, and protection of small investors. However, critics now argue that her term failed to deliver on these fronts.

Jane Street is accused of using a "pump and dump" strategy to manipulate Indian stock indices on at least 21 occasions between January 2023 and May 2025. Reports estimate the firm earned illegal profits of around Rs 4,843 crore during this period. These actions allegedly caused heavy losses to retail investors.

Despite early warning signs from a US court in 2024 and concerns raised by the National Stock Exchange (NSE) in early 2025, SEBI under Buch reportedly failed to act. Even its advanced AI-based monitoring systems, touted as revolutionary, failed to catch the manipulations.

Current SEBI Chairman Tuhin Kanta Pandey has moved quickly in his first six months, taking bold steps to restore trust in the market. The ban on Jane Street is being seen as a strong message to wrongdoers and a sign of renewed focus on market integrity.

Experts say the Jane Street episode reflects deeper issues of negligence, poor regulatory judgement, and misplaced priorities during Buch’s term. Her leadership has now come under fire for favouring headline reforms over actual enforcement, and for ignoring red flags linked to large global funds.

With Jane Street expected to challenge the ban, the matter may soon head to court.