What Jane Street did was plain, old-fashioned manipulation: Whistleblower

Jane Street’s alleged manipulation of Indian stock markets has triggered alarm across financial circles. In this searing exclusive interview with The Federal, whistleblower Mayank Bansal details how the US-based trading firm engineered daily distortions of India’s derivatives and cash markets to book abnormal profits amounting to ₹22,500–25,000 crore.

Bansal lays bare how the scam operated, why it went undetected, and what India must do next.

What first raised your suspicion about Jane Street’s trades?

It wasn’t one day—it was every day. From June or July 2023, a pattern tied to implied volatility kept showing up. That’s a measure of option pricing—how cheap or expensive they are. The manipulation worked like this: take massive derivative positions, then manipulate the underlying cash market to profit off them. Our derivatives market is deep and liquid, but the cash market is shallower. Once these positions were set, the market could be moved heavily to generate profits.

How exactly was this manipulation structured?

There were two main strategies—quiet expiry and violent expiry. In a quiet expiry, they would sell a huge number of options to drive their prices to absurdly low levels—options were dirt cheap. Then, they’d ensure the market didn’t move, so those short positions remained profitable. No matter the news—war, trade conflict—they kept the market still. The intent was always to profit from artificially suppressed volatility.

In a volatile expiry, they’d buy massive amounts of call options, making them extraordinarily expensive. Then, in the second half of the trading day, they’d deliberately push the market in the direction they’d bet on—upwards or downwards—ensuring those bets paid off. They weren't just anticipating moves; they were manufacturing them.

How long did this go on?

This manipulation happened almost daily from June 2023 until February 2024—about 90–95% of trading days. It temporarily paused after SEBI sent Jane Street a cautionary letter in February. Jane Street admitted it stopped trading to understand SEBI’s concerns. When it resumed trading, the manipulation resumed as well. You could literally see it on the market screen.

How did this escape the notice of Indian regulators?

It’s a massive failure in market surveillance—by both SEBI and the exchanges. Trades this large should be tracked in real time. If Jane Street had shut shop and repatriated profits, we’d have been left chasing shadows. This kind of manipulation is a financial attack on the country. Real-time alerts and monitoring are critical.

Was Jane Street the only one involved?

Not necessarily. But Jane Street’s actions were clearly visible and dominant. And you don’t need enormous capital to manipulate—₹1,000 crore is enough. That sum can give you ₹6,000 crore worth of futures exposure. Since net FII and DII activity often moves markets by ₹3,000–₹4,000 crore, adding that extra weight can easily tip the index.

Shouldn’t SEBI pursue criminal charges, not just issue notices?

Absolutely. Under Section 24 of the SEBI Act, SEBI can seek criminal prosecution with jail terms up to 10 years. This wasn’t small-time fraud—this was an orchestrated, long-term financial crime. It’s akin to economic warfare. The punishment must match the gravity.

Do you think other emerging markets are at similar risk?

Definitely. Countries with less liquid or less surveilled markets—like those in Southeast Asia—are even more vulnerable. Many are now asking their regulators to examine Jane Street’s activities. If it could happen in India, it could happen anywhere.

Given the scale, shouldn’t there be global accountability?

Yes. This scam is not as complex as crypto-related frauds—it was plain, old-fashioned manipulation. The regulators should’ve caught it. It’s not acceptable to miss something this blatant. Market participants spotted it as early as January 2024.

Is there legal recourse for Indian investors?

Class action suits are tough here. PILs can be filed, but courts are slow, and technical finance cases often get rejected. Your best bet is to keep the pressure on SEBI—they understand the markets better than the judiciary and are better placed to act.

As a whistleblower, did you worry about your career?

Not at all. I had no intention of working with Jane Street anyway. I waited for months, hoping regulators would act. But they didn’t. I had to speak out—not for heroism, but because it was painful to watch my country’s markets being puppeteered. It was a slap to our entire financial system. Conscience made me speak up.

How much money did Jane Street allegedly make through this?

About ₹22,500–₹25,000 crore in calendar year 2024 alone. That’s equivalent to the combined sum of the Nirav Modi, Vijay Mallya, and Ketan Parekh scams. And this happened in one year. It’s the Godzilla of scams.

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