Jane Street hits back at Sebi’s allegations, says ‘regulator changed the goal posts’

Jane Street has responded to Sebi's allegations, contending that the regulator has "changed the goal posts" in its ongoing probe into the firm's alleged manipulative trading strategy. Jane Street's lawyer, Darius Khambata, told the Securities Appellate Tribunal (SAT) that the firm sought a swift resolution to the case, noting that its capital is at risk and its reputation is on the line.

Khambata said that Jane Street complied with Sebi's demands without a hearing, describing the order as an ex-parte order. The firm has ceased its trading activity in the country and challenged the regulator's focus on the scale of its trading, arguing that size alone does not equate to manipulation.

Jane Street submitted a detailed 12-page explanation of its trading strategy on August 30, 2024, to Sebi and the National Stock Exchange before the exchange and investor surveillance department reports were prepared. The firm had multiple discussions with NSE and Sebi officials to clarify its strategy, which constitutes global hedging practices, Khambata stated.

Khambata accused Sebi of post facto changes to the case against Jane Street, questioning why the regulator refused to disclose the identities of complainants, which he deemed "untenable." He also objected to Sebi's inclusion of counterparty details in documents shared with the firm, arguing that the regulator was "cherry-picking" documents.

Khambata emphasized that Sebi's order had significant civil consequences, as it directed Jane Street to cease trading until the money was deposited. Any order with civil consequences is an adjudication, and the right to a fair hearing is a constitutional right, Khambata stated. The deposit order issued by Sebi is reportedly the largest of its kind.