Jane Street to challenge SEBI’s market manipulation charges, calls allegations ‘Inflammatory’: Report

India’s markets regulator is enhancing its surveillance to scrutinize manipulation in derivatives trading, its chairman said on Monday.

Jane Street plans to contest a finding by India’s financial regulator that the U.S. trading firm engaged to manipulate the country’s markets, the Financial Times reported on Monday.

Jane Street’s senior management said it was ”beyond disappointed” by the regulator’s ”extremely inflammatory” accusations and were ”working on a formal response” to rebut them, the newspaper reported, citing a memo sent by the company to its roughly 3,000 employees on Sunday.

On Friday, the Securities and Exchange Board of India barred the firm from buying and selling securities in the Indian market and also seized $567 million of its funds.

SEBI has widened an investigation into alleged market manipulation by Jane Street to include other indexes and exchanges, a source familiar with the matter told Reuters last week.

”It’s deeply upsetting to see the firm mischaracterised this way,” the memo read, a copy of which was seen by the Financial Times. ”We take pride in the role we serve in markets around the world, and it’s painful to have our firm’s reputation tarnished by a report based on so many erroneous or unsupported assertions.”

SEBI and Jane Street did not immediately respond to Reuters’ requests for comment.

”Once again, we left this process feeling that we had reached an understanding of the concerns and reflected them in modifications to our trading behaviour,” the FT reported, citing the company’s memo. ”Since February, we have made ongoing efforts to communicate with SEBI and have been consistently rebuffed.”

India’s markets regulator is enhancing its surveillance to scrutinize manipulation in derivatives trading, its chairman said on Monday.

The regulator has alleged that Jane Street bought large quantities of constituents in India’s Bank Nifty index in the cash and futures markets to artificially support the index in morning trade, while simultaneously building large short positions in index options.

In response to the allegations at that time, Jane Street said it disputes the findings of the interim order and will further engage with the regulator.