A Citadel Rival Now Denies Market Manipulation in Court

A Citadel rival is now denying market manipulation in a court after allegedly manipulating a country’s banking stock index to profit from derivatives trading.

Jane Street is facing another setback following its $15 billion loss after a margin call forced one of its biggest bets to sell most of its public equities in August.

The massive $15 billion loss for Jane Street in July is the hedge fund’s first monthly downturn in 10 years.

The loss led to major US banks such as Bank of America, Citi, Goldman Sachs, and JPMorgan Chase to receive subpoenas by the Securities and Exchange Commission (SEC).

Now, the Citadel rival is facing another battle overseas.

Jane Street Market Manipulation Allegations

India’s Securities and Exchange Board (SEBI) is alleging that Jane Street coordinated trades in banking stocks and derivatives tied to the NSE Nifty Bank index to influence prices in ways that benefited its options positions.

SEBI’s investigations into options trading manipulation first began to intensify in August of 2025 after the need for transparency and accountability became paramount.

According to the regulator’s allegations, the firm purchased large quantities of banking stocks and futures while building options positions, then sold those holdings later in the trading session.

SEBI contends that this activity artificially influenced prices and generated illicit profits.

Jane Street, however, is denying the allegations to market manipulation.

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The firm’s defense is that movements in the underlying banking stocks were not consistently caused by its trading activity.

Its lawyer, Darius Khambata, argued that the index’s constituent stocks sometimes rose even when Jane Street was selling them.

The firm also says the available evidence does not establish the necessary connection between its trades, price movements, and profits from derivatives.

Jane Street said earlier reviews by the National Stock Exchange and SEBI’s surveillance department did not find sufficient evidence of manipulation.

Now the firm is pressing India’s regulators, demanding for evidence that it manipulated its markets.

The firm is challenging the regulator’s handling of the investigation and requesting documents, including:

• Communications between SEBI and the National Stock Exchange.
• The complaints and internal communications that prompted further investigation.
• More complete trade logs and counterparty information.

In July 2025, SEBI ordered Jane Street to deposit 48.4 billion rupees, approximately $503 million at the time, representing alleged unlawful gains.

Jane Street deposited the money while disputing the allegations, but it had not resumed trading in India as of its latest October report.

Also Read: Paul Atkins Says Clarity is Coming To The Markets But Retail Investors Aren’t Convinced

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