Jane Street Market Scam: Zerodha CEO Warns of Risks to Brokers and Exchanges

Market regulator Sebi’s crackdown on Jane Street may have been necessary, but it could spell trouble for stock exchanges and brokers, according to Zerodha Founder and CEO Nithin Kamath. Kamath warned that if proprietary trading firms like Jane Street, which account for nearly 50% of options volumes, pull back, retail participation could also take a hit.

Lauding SEBI’s intervention, Kamath said that if the allegations are proven, it would amount to blatant market manipulation. He also highlighted the differences between the U.S. and Indian regulatory regimes.

Jane Street, one of the world's most sophisticated trading firms, allegedly pulled off a Rs 36,500 crore market scam, making a whopping Rs 43,289 crore in options profits while deliberately losing Rs 7,208 crore in futures and equities. Sebi has imposed interim restrictions on Jane Street entities and frozen their accounts.

Sebi has given Jane Street 21 days to file objections and can request a personal hearing. The stock exchanges have been directed to closely monitor any future dealings by Jane Street to prevent manipulative activities.

According to the source: The Economic Times.