With the help of AI, Jane Street earned thousands of crores from woven nets, market manupulation, how did SEBI get tricks?
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With the help of AI, Jane Street earned thousands of crores from woven nets, market manupulation, how did SEBI get tricks?

By Cross Talk India Team
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Jane street market manipulation: The world’s big trading firm Jane Street Group is accused of incorrectly manipulating the stock market and earned a profit of Rs 36,000 crore. However, SEBI had issued an order to seize more than Rs 4,800 crore earned from futures and options deals on Jane Street last week to seize more than Rs 4,800 crore and stop its market access. SEBI found in one of his studies a few months ago that more than 90 percent deals of retail investors proved harmful to him.

What is Jane Street: Jane Street is a very big name in equity, bonds and options markets. Started in New York in 2000, this company is currently working in 45 countries. It acts as a data analysis in a state -of -the -art way for its clients. A large number of foreign investors invest in markets around the world including India through this company.

How did Jane Street lose Indian stock market: Highlighting the Gen Street case, market expert Yogesh Bagaura said that SEBI found in his investigation that since 2023 he was menipulating the Indian stock market with wrong practice. It wanted to earn a fast short term profit. For this, he took advantage of SEBI’s Loo Poles (weaknesses). The market used to have earlier weekly expiry. On the day of weekly expiry, these people used to do bulk perchasing in the market. For example, if they took the bank Nifty, they used to take shares of HDFC, ICICI, SBI in bulk.

For this, he had prepared an AI based software that could do thousands of millions of trades with in a second. This software was designed for a special Indian stock market. This software of Elgo Trade was Fully Automatic. Artificial Boying was developed with the help of this software. Investors had a lot of money in his pool account.
According to Bagaura, Jane Street used to create Bing with the help of software. Now, as he created Bing in the shares of Bank Nifty. With this it went up from 500 to 600 points. Call and put premium decreases significantly on the last day of expiry. When the bank Nifty went up from 500 to 600 points, the premium of the call increases completely. That means a call of 20 rupees used to be 100 rupees. They used to sell a call of 100 rupees. When there was plenty of shotting, the bank would go up after that, then the premium of the put would be reduced further. 20 rupees would be put 1 rupee, 2 rupees, 5 rupees or 10 rupees. They used to bypass that put. Selling the calls up and bought the put in the bottom. When both work was done, they would have dumped what they had done in physical. Thousands of millions of shares would be dumped in a minute in a minute. This would break the bank Nifty again and fall down. At this time, the premium of the call would come down, the goods they sold down for Rs 100 for Rs. 2-3. They got full benefit in the call, they also had a lot of profit in put. They used to lose slightly in stock and future. They suffered a loss of Rs 36 crore in 1 day. He made a profit of 750 crores in the options. In this way, he took out 36 thousand crores from the market.

How did Sebi catch : According to Bagaura, when Sebi saw something wrong was going on. Options trading is coming to a halting, when they searched it, they came to know that there is a company that makes a very big position and leaves them together. When the case was thoroughly investigated, the software was detected. After this, Jane Street was investigated. It was found that they are doing unauthorized wrong practice. Due to this, common investors are not aware of what is happening. The call put bought by the common investor, he completely strangled his premium. They took all this money. Because of this, SEBI banned them. Due to such practice, big changes were also made in expiry.

What did Rahul Gandhi say: Leader of Opposition Rahul Gandhi said in his post on the social media site X, I had clearly said in 2024 – F&O has become a game of ‘big players’, and the pockets of small investors are constantly cutting. Now SEBI himself believes that Jane manipulation of thousands of crores. Why did SEBI remain silent for so long? At whose behest the Modi government was the eyes sitting? And how many big sharks are still shorting retail investors? In every case, it is clearly visible – the Modi government is making the rich more rich, and has pushed the common investors to the verge of ruin.

What did SEBI chief say: Tuhin Kant Pandey, chairman of the Securities and Exchange Board of India (SEBI), said that the market regulator does not see other risks like the rigging made by the foreign hedge fund Jane Street. He said that the market regulator is considering upgrading its monitoring system. Whatever steps the regulator takes to protect retail investors in the derivative market will be based only on data.

What will be the effect on Jane Street: Capital market regulator SEBI has ordered Jane Street to confiscate illegal profits of Rs 4,843.57 crore. This amount will have to be deposited in an escrow account in the name of SEBI. The company cannot sell any of its property in India until the money is deposited in the escrow account. She can now buy or sell securities neither direct nor indirectly in the Indian stock market. All bank accounts, demat accounts and custodial accounts of the company have been freezed. Jane Street has the right to register an objection against SEBI’s order within 21 days. The company may also request for personal hearing.

SEBI has so far investigated the prima facie 18 days of bank Nifty and three days manipulation in the Nifty Index in the Nifty Index. The investigation in SEBI’s Zen Street case will continue even after the interim order. It is being told that the investigation will now focus on other expiry days, other indices including deal at other markets and other possible trends.

Effect on common investors: Bagaura told that he took 36 thousand crore rupees from the market. SEBI imposed a fine of only 4800 crores. The figure of 36 thousand crores can be even bigger but cannot be reduced. The money that has gone remained from coming back. More companies of Jane Street may be in the market. They should also be investigated. SEBI should ensure that there are no such unauthorized activities in the market in the future. NSE, BSE responsibilities should also be increased. They should see that if such deals are coming to their exchange then SEBI should be informed. Many brokers have also suffered a lot of damage in this case. Overall, the common investor has been a victim of cheating in this case.

Edited by: Nrapendra Gupta



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