Global high frequency trading major Jane Street has hired at least two leading domestic law firms along with one global entity to help navigate the legal and compliance issues arising from the recent order issued by the Securities and Exchange Board of India (SEBI).
According to sources familiar of the development, AZB & Partners, Khaitan & Co along with Sullivan & Cromwell LLP have been signed in by Jane Street.
While both AZB & Partners and Khaitan & Co are among the leading domestic corporate law firms of India, Sullivan & Cromwell LLP is headquartered in New York and is a global law firm that advises on corporate transactions, investigations, restructuring, regulatory, tax and estate planning matters among other things.
“The recent SEBI order is an important one and Jane Street wants to ensure that all legal and compliance issues are sorted especially given the fact that it operates in various jurisdictions under various regulatory bodies,” said a lawyer involved in the matter.
“It is quite common in such matters for companies to hire more than one law firm as various aspects of the legal framework across countries have to be managed. Th scope of work typically becomes too big for just one firm,” he added on conditions of anonymity.
Interestingly, another senior lawyer involved in the matter said that while there may be 2-3 law firms officially onboarded, many other senior lawyers and large law firms would be “conflicted” as Jane Street would have sought opinion on certain aspects of the ongoing regulatory issues.
“Companies often seek opinions from leading lawyers and firms as well, which makes such entities an interested party in the matter. What it also means is that such firms or senior lawyers cannot be engaged with the opposite party, in this case SEBI, as and when the matter reaches a court of law or tribunal,” said the lawyer wishing not to be named.
Meanwhile, email queries sent to Jane Street, AZB & Partners, Khaitan & Co and Sullivan & Cromwell LLP remained unanswered till the time of publishing this story.
The roots of the matter go back to July 3 when SEBI barred Jane Street from trading in the Indian securities market after a probe revealed that the global HFT entity was allegedly involved in fraudulent and unfair trade practices.
The capital market watchdog directed Jane Street to deposit Rs 4,843.5 crore, which, as per the regulator, was ill-gotten gains. Incidentally, Jane Street has already deposited the money in an escrow account.
The regulator, on Monday, clarified that it has allowed the HFT entity to resume trading subject to certain conditions and amid heightened monitoring by the stock exchanges.
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