Cong slams SEBI for ‘failing to act decisively’ against market manipulation by US firm

New Delhi: The Congress on Tuesday questioned market regulator SEBI for “failing to act decisively against rampant market manipulation” by US algorithm trading firm Jane Street.

“Despite repeated warnings and mounting evidence of illegal trading practices, SEBI’s delayed response has allowed the international entity to manipulate India’s stock markets, inflicting massive losses on retail investors,” the Congress said in a statement.

Jane Street began its operations in India in 2020, focusing on the Futures and Options (F&O) market, a notoriously volatile and risky space. Between January 2023 and March 2025, the firm accumulated a staggering Rs 43,289 crore in profits, most of which are now under scrutiny by SEBI.

The regulator’s response has been “tepid, with only a 105-page interim order issued on July 3, freezing Rs 4,844 crore in alleged illegal profits. This represents only a fraction of Jane Street’s actual gains, with much of the firm’s trading activities remaining outside the purview of SEBI’s investigation,” the statement added.

Despite the scale of this manipulation, SEBI took nearly four and a half years to act, the party claimed.

Jane Street’s speculative trades involved the “illegal manipulation of stock prices in the direct equity market, with blatant market manipulation techniques like marking the close to artificially influence stock prices. These manipulated prices were then exploited in the F&O market through massive volumes of Put and Call Options, a strategy that allowed Jane Street to rake in illegal profits while small investors incurred substantial losses. It is estimated that 93 percent of retail investors in the Futures market lost money during this period, with an average loss of Rs 1.25 lakh per investor”.

Leader of the Opposition, Rahul Gandhi, had repeatedly warned SEBI and the government about the risks posed to small investors in the F&O market, but his concerns were ignored, the Congress said.

“The government’s inaction, particularly during the tenure of SEBI Chairperson Madhabi Puri Buch, has raised questions about the true extent of regulatory oversight or lack thereof,” it added.

The delay in action was further highlighted when, in February 2025, SEBI issued a “mild warning to Jane Street, but the firm continued its manipulative trading until May 2025. By this time, Jane Street had already transferred a significant portion of its illicit profits back to its home country. The firm’s use of India’s Double Taxation Avoidance Agreement (DTAA) with the United States enabled it to avoid paying taxes on its earnings, further undermining India’s financial integrity,” the party claimed.