Sebi Chief Tuhin K Pandey Warns: Market Manipulation in Jane Street Case Won’t Be Tolerated

In response to alleged manipulative trading activities by Jane Street, a prominent US-based proprietary trading firm, Sebi Chairman Tuhin Kanta Pandey issued a strong warning on Saturday, asserting that market manipulation will not be tolerated in the Indian capital markets. This warning follows a major enforcement action by the Securities and Exchange Board of India (Sebi), which ordered the impounding of ₹4,843.57 crore in alleged illegal profits earned by Jane Street through manipulative trades. The regulator also barred the firm from participating in securities transactions until the complete recovery of the illicit gains, stating that “JS Group is not a good faith actor that can be, or deserves to be, trusted.”

Pandey made these remarks on the sidelines of the 77th Foundation Day celebration of the Bombay Chartered Accountants’ Society (BCAS). When asked whether Sebi was reassessing the operational models of foreign portfolio investors (FPIs) setting up offices locally post the Jane Street incident, Pandey reaffirmed that Sebi had already stepped up surveillance measures at both the exchange and regulatory levels. He noted that the Jane Street case was fundamentally a surveillance issue and emphasized Sebi’s proactive monitoring approach.

In his keynote address on the theme “Corporate Governance, in Letter and Spirit – Role and Responsibility of Professionals,” Pandey underlined that corporate governance is not merely a choice in today’s complex business environment, but a necessity. He described corporate governance as a crucial link between a company’s performance and the trust it garners from stakeholders. According to him, effective governance practices are central to maintaining investor confidence, ensuring independent boards, and facilitating thorough oversight in listed entities.

Pandey highlighted that Sebi has implemented several measures to bolster corporate governance in India, notably referencing the introduction of Clause 49 in the Equity Listing Agreement in 2000. This clause brought structured governance standards to the Indian capital markets for the first time, marking a significant milestone in regulatory evolution.

He further explained that Sebi follows a hybrid approach in its corporate governance framework, integrating both rule-based and principle-based guidelines. Pandey emphasized the importance of transparency in capital markets, arguing that transparency, trust, and equal access to information are fundamental pillars of a healthy financial system.

In the same address, Pandey called on chartered accountants to uphold their vital role as financial custodians of corporate India. He praised their responsibilities in ensuring honest financial reporting and maintaining public trust. He stressed that disclosing related-party transactions, managing conflicts of interest, and timely reporting of material events are non-negotiable duties for financial professionals.

He concluded by stating that chartered accountants serve as a crucial bridge between company management, auditors, and regulators, and that they must consistently uphold the principles of fairness, independence, and accountability in both spirit and practice.

Overall, Sebi’s actions in the Jane Street case, along with its broader push for corporate governance and market integrity, signal a determined stance against malpractice and a commitment to investor protection and financial transparency.