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Jane Street plans to contest a finding by India’s financial regulator that the Wall Street trading firm engaged in “an intentional, well planned, and sinister scheme” to manipulate the country’s markets. 

On Friday, the Securities and Exchange Board of India banned the US trading firm from dealing securities in the country, alleging that it had systematically manipulated Indian bank stocks to trigger huge payouts on related derivatives. SEBI also ordered Jane Street to return more than $550mn of “illegal gains”. 

In a memo sent to its roughly 3,000 employees on Sunday, Jane Street’s senior management said that they were “beyond disappointed” by SEBI’s “extremely inflammatory” accusations and were “working on a formal response” to rebut them.

“It’s deeply upsetting to see the firm mischaracterised this way,” said the memo, a copy of which was seen by the Financial Times. “We take pride in the role we serve in markets around the world, and it’s painful to have our firm’s reputation tarnished by a report based on so many erroneous or unsupported assertions.”

SEBI said last week that Jane Street had 21 days to object to the order and request a hearing.

Jane Street is one of the biggest and most successful of a new generation of “proprietary trading firms” that have emerged over the past two decades and become hugely influential in an array of markets.

The New York-headquartered firm nearly doubled its net trading revenues to $20.5bn last year, outpacing several of Wall Street’s biggest banks. In the first quarter of 2025 Jane Street notched up net trading revenues of $7.2bn, more than Morgan Stanley.

SEBI’s investigation was triggered by revelations from a lawsuit launched by Jane Street last year against Millennium Management and two former traders that had moved to the hedge fund.

Jane Street’s complaint alleged that the traders had stolen a hugely valuable trading strategy, which was later revealed to revolve around Indian options trading.

SEBI’s investigation has so far focused on Jane Street’s trading in shares, futures and options tied to the BANKNIFTY index of Indian banking stocks, but regulators indicated over the weekend that they were also looking at other corners of India’s financial markets.

Jane Street’s memo to staff said that the Indian regulator had used “a metric for market impact and trading aggressiveness which seems disconnected from actual market dynamics”. It argued that the details of its trading on January 17, 2024 — one of the days highlighted in SEBI’s report — actually showed “basic arbitrage trading”, a standard strategy in the industry.

Jane Street’s executives were also incensed by SEBI’s assertion that the firm had ignored concerns voiced by local stock exchanges, which the regulator cited as justification for the sudden and unprecedented ban on the trading firm’s Indian activities.

This allegation “felt especially far from reality”, Jane Street’s memo said. The trading firm said it had at the time immediately turned off its trading “until we could better understand the exchanges’ concerns”, and then modified its strategies to address their “preferences”.

“Once again, we left this process feeling that we had reached an understanding of the concerns and reflected them in modifications to our trading behaviour,” the memo said. “Since February, we have made ongoing efforts to communicate with SEBI and have been consistently rebuffed.”