Jane Street Hires DC Lobbyists Amid India Probe, Trading Revenue Soars
Jane Street Group is under an expanded investigation by India's SEBI for alleged market manipulation, including potential index manipulation for profit from 'short straddle' options strategies. The firm has hired Washington lobbyists for the first time in 20 years, engaging with government agencies to discuss its India operations. Despite regulatory challenges, Jane Street projects record trading revenue of $30 billion by 2025, excluding India. The company denies wrongdoing and has appealed SEBI's interim order, with a hearing scheduled for January 19.
*this image is generated using AI for illustrative purposes only.
Jane Street Group has hired Washington lobbyists for the first time in 20 years while facing an expanding investigation from Indian regulators over alleged market manipulation practices. The privately-held trading firm has engaged in proactive meetings with lawmakers as India's Securities and Exchange Board (SEBI) prepares to conclude its multi-year investigation into the company's trading strategies.
Expanded Regulatory Investigation
SEBI is investigating additional trading strategies used by Jane Street, including alleged manipulation of India's biggest index to profit from options strategies known as "short straddles." The investigation focuses on whether Jane Street's significant market impact, at times comprising 40% of trading volume in underlying securities, allowed it to manipulate closing prices in its favor.
| Investigation Details | Amount/Status |
|---|---|
| Escrow Amount Ordered | $570.00 million |
| India Trading Profits (Jan 2023-Mar 2025) | $4.30 billion |
| Market Share at Peak | 40% of trading volume |
| Investigation Timeline | July announcement, conclusion expected soon |
The additional strategy under scrutiny involves the simultaneous selling of index call and put options at the same strike price on settlement days. While short straddle strategies are commonly used by traders, regulators are examining whether Jane Street's outsized market influence enabled price manipulation. SEBI could order the firm to disgorge additional profits on top of the $570.00 million already placed in escrow.
Washington Lobbying Strategy
Jane Street paid law firm Hogan Lovells $160,000.00 from July to September to engage government agencies on matters "related to the regulation of financial investments." This marked the firm's first lobbying disclosure in two decades, excluding one tax-related filing earlier in the year.
| Lobbying Activities | Details |
|---|---|
| Lobbying Fees (Jul-Sep) | $160,000.00 |
| Government Agencies Met | Treasury, Commerce, Executive Office |
| Meeting Topics | Jane Street's India operations |
| Key Representative | Co-founder Rob Granieri |
The firm's representatives have met with the Treasury Department, Commerce Department, and Executive Office of the President to discuss Jane Street's operations in India. Co-founder Rob Granieri has separately engaged with lawmakers in what sources describe as introductory conversations aimed at explaining the firm's market-making operations and how it generates trading revenues exceeding many of the world's largest investment banks.
Record Financial Performance
Despite regulatory challenges in India, Jane Street has achieved unprecedented financial results. The company's trading revenue is projected to reach $30.00 billion by the end of 2025, representing a 50% increase over the previous record year. This projection excludes revenue from India, previously home to the firm's most profitable trading strategy.
| Financial Performance | Results |
|---|---|
| Q3 Trading Revenue | $7.00 billion |
| 2025 Projected Revenue | $30.00 billion |
| Year-over-Year Growth | +50% |
| US Bank Ranking | Third highest after JPMorgan and Goldman Sachs |
After scaling back its India exposure, Jane Street has expanded trading in other markets, including US Treasuries, interest rates, and Asian ETFs. The firm generated nearly $7.00 billion in trading revenue during the third quarter, ranking third among US banks behind JPMorgan Chase and Goldman Sachs Group.
Legal Proceedings and Defense
Jane Street has consistently denied wrongdoing and filed an appeal against SEBI's interim order, scheduled for hearing on January 19. The company argues it has been denied access to crucial documents needed to contest the market manipulation accusations. Jane Street maintains that its trading activities constituted legitimate arbitrage trades that helped close price gaps between cash, futures, and options markets.
SEBI's July interim order detailed allegations that Jane Street used its "immense trading, financial and technological prowess" to influence price action. On one January day, the firm allegedly purchased $512.00 million worth of index components and futures while simultaneously taking bearish positions worth seven times its cash and futures position. The firm told staff that the Indian regulator made "many erroneous or unsupported assertions" about its trading activity, noting that SEBI's surveillance department had previously reviewed the same trades and found no manipulation evidence in most cases.
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