Business
Jane Street hires DC lobbyists as India probe presses on
Jane Street Group has hired lobbyists for the first time in 20 years, and top executives have been proactively meeting with lawmakers. In some cases, those appointments have been pitched as simple, get-to-know-Jane-Street conversations, part of an effort to explain how the privately-held firm makes markets and is generating trading hauls greater than many of the world’s largest investment banks in the process, according to people familiar with the meetings who asked not to be identified discussing private communications.
Eight thousand miles away, regulators are getting ready to deliver their own conclusions. As part of a probe announced in July, the Securities and Exchange Board of India is investigating additional trading strategies Jane Street used, including allegedly manipulating the country’s biggest index to make money with an options strategy commonly known as a “short straddle,” according to people familiar with the investigation.
Both developments, along with the firm’s record-setting profits, underscore a rapid evolution at Jane Street: Keeping a low profile is no longer an option. SEBI is expected to conclude its investigation soon, the people said, bringing the initial phase of the probe to a close.
The company simultaneously established a new benchmark for its business, with trading revenue on pace to reach $30 billion by the end of 2025, a 50% increase over the record-setting year prior. That’s absent revenue from India, the market once home to the firm’s most profitable trading strategy.
In July, SEBI accused Jane Street of “egregious” market manipulation in an interim order while it continued to investigate the company. It temporarily banned the firm from the country’s markets and ordered it to put $570 million — the amount of ill-gotten gains plus penalties, according to the regulators — in escrow. Jane Street had already scaled back its trading there in the first half of the year; it ceased all activity after the July enforcement order.
Jane Street filed an appeal, which will be heard next month. It has consistently denied any wrongdoing in India. “Jane Street’s trading has been at all times proper,” a representative for the firm said in a statement. At the same time, Jane Street began lobbying in DC. Like many market-makers, the firm is in regular contact with regulators in Washington and in other jurisdictions where it does business. This year, it paid law firm Hogan Lovells $160,000 from July to September to engage government agencies on matters “related to the regulation of financial investments,” according to public disclosures.
Except for one tax-related filing earlier this year, it was the first lobbying disclosure on Jane Street’s behalf in two decades.
The firm’s representatives have met with the Treasury Department, Commerce Department and the Executive Office of the President to discuss Jane Street’s operations in India, according to the lobbying disclosures and the people familiar with the matter, who asked not to be named discussing non-public information.
Separately, Jane Street co-founder Rob Granieri has also met with lawmakers, the people said.
After cutting its exposure to India, Jane Street has ramped up its trading in other markets, including US Treasuries, interest rates and ETFs in Asia, according to people familiar with the firm’s operations. The firm made nearly $7 billion in trading revenue in the third quarter, more than any other US bank except JPMorgan Chase & Co. and Goldman Sachs Group Inc.
As SEBI begins to wrap up its yearslong probe of Jane Street’s trading strategies, investigators have identified at least one more strategy they suspect could be manipulative, the people said, and could order the firm to disgorge additional profits on top of the $570 million it put in escrow in July. Jane Street made around $4.3 billion from trading in India between January 2023 and March 2025, according to SEBI’s interim order.
The additional trading strategy involved the simultaneous selling of index call and put options at the same strike price on settlement days, according to the people. There’s nothing improper about a “short straddle,” which traders commonly use to bet on a security or index holding near a certain level, or when they anticipate low volatility.
But Indian regulators are looking into whether Jane Street’s outsized impact on the index – it at times made up 40% of the trading volume in the underlying securities – allowed it to manipulate the closing price in its favor, the people said.
A spokesperson for SEBI did not respond to multiple requests for comment about the investigation.
The interim order issued in July had detailed a different strategy. It alleged that Jane Street used its “immense trading, financial and technological prowess” to influence price action in futures and in the cash market.
On one day in January, for example, the firm purchased $512 million worth of index components’ shares and futures in what SEBI alleges was a deliberate and aggressive manner designed to boost prices.
At the same time, Jane Street took bearish bets worth more than seven times its cash and futures position and later reversed “practically all” of its net cash and futures trades to depress the value of the index, SEBI said, and consequently, boost the profit of the bearish options bets.
Jane Street has dismissed SEBI’s characterization and said it was merely undertaking an arbitrage trade that helped close price gaps between the cash, futures and options markets. It also told staff that the Indian regulator made “many erroneous or unsupported assertions” about its trading activity.
The firm appealed in September, arguing that it has been denied access to crucial documents it needs to fight accusations of market manipulation. Jane Street also said the regulator’s surveillance department had previously reviewed the same trades and found no evidence of manipulation in most cases.
The appeals court is slated to hear those arguments on Jan. 19.
