Jane Street vs SEBI: "Ulta chor kotwal ko daante", regulator tells SAT, calls document demand a delaying tactic

The Securities and Exchange Board of India (SEBI) on Tuesday (October 6) told the Securities Appellate Tribunal (SAT) that Jane Street's demand for more documents was a delaying tactic, and that the trading firm was trying to turn the focus from its own conduct to the regulator's investigation.

Opening his arguments for SEBI, Senior Advocate Gaurav Joshi described Jane Street's approach with the Hindi proverb "ulta chor kotwal ko daante", roughly meaning the thief scolding the policeman. He later told the bench he had chosen the Hindi phrase over the English one for a reason.

Joshi said Jane Street should answer the allegations on merits instead of questioning why SEBI investigated it. He pointed out that the firm has not yet filed a reply to the interim order.

"Fishing and roving inquiry"

SEBI said it has shared over 10 GB of material beyond what the interim order relies on, including the NSE and ISD reports with annexures, file notings and minutes of internal meetings.

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Joshi called Jane Street's demands dilatory tactics and a fishing and roving inquiry. Each document shared, he said, led to a fresh request for the emails and attachments it referred to. "So, basically open your entire office," he told the tribunal.

He said SEBI had "made an error" in sharing extra material to move the hearing forward, and that Jane Street had delayed proceedings by 1.5 years.

Responding to Jane Street's argument that it was cleared in late 2024, SEBI said the Stock Exchange report of November 13, 2024 was a surveillance-level review. SEBI's own Integrated Surveillance Department report of December 11, 2024, was an internal assessment, not an investigation under Section 11C of the SEBI Act, Joshi said.

According to SEBI, it formed an inter-departmental team on December 31, 2024, after internal deliberations on abnormal volatility on expiry days. The team reported on February 4, 2025, and the formal investigation began in March 2025.

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"Some officers may have taken a different view. That is bound to happen in every organisation," Joshi said.

SEBI said its case does not allege synchronised trades or collusion with any third party. It rests solely on how the Jane Street group's own entities traded on expiry days.

On January 17, 2024, SEBI said the group bought Bank Nifty constituent stocks and futures worth around ₹4,370 crore in the morning while building a bearish options position worth around ₹32,114 crore. The positions were later sold; the index fell and the options gained.

Joshi said foreign portfolio investors cannot trade intraday in the cash market. This, he said, is why the Indian entities did the cash trades and booked losses while the Singapore entity profited in options.

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SEBI urged SAT to settle what documents a regulator must share at each stage, citing a rise in appeals against inspection orders. Relying on Supreme Court rulings in Natwar Singh and Kavi Arora, it argued that only documents relied upon in the order must be shared at this stage.

Joshi described the interim order as a freezing order, saying the final amount after investigation could be larger, smaller or nil.

On Monday, Jane Street had pressed the tribunal for details of how SEBI's investigation began, arguing that NSE and SEBI's surveillance department found no manipulation in late 2024.

In July 2025, SEBI barred 4 Jane Street entities from the market and impounded ₹4,843.57 crore in alleged unlawful gains over manipulation of the Bank Nifty and Nifty indices. The curbs were lifted after the firm deposited the amount in escrow. Jane Street denies wrongdoing and says its trades were index arbitrage.

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The hearing will continue on Wednesday.