They built a billion-dollar machine, walked out the door, and left a ticking time bomb behind. Now, Jane Street is banned, ₹4,844 crore is frozen, and SEBI is chasing the wreckage of what may have been the most engineered expiry scam in Indian market history.
At the center? Two traders who knew the system inside out, a whistleblower who tracked it in real time and a billionaire rival whose entire desk collapsed trying to keep up.
Mystery exits in 2024
Douglas Schadewald and Daniel Spottiswood weren’t just any traders. They designed and ran Jane Street’s India index options desk, credited with generating $1 billion in 2023. In early 2024, they abruptly left for Millennium Management. Jane Street sued, claiming they took the playbook with them. The firm’s India profits dropped over 50% after their exit.
The case settled quietly in December 2024—but the real storm was still brewing.
Enter Mayank Bansal
While the lawsuit played out, Mayank Bansal, head of a UAE-based hedge fund, began warning regulators about expiry-day trades that didn’t make sense. Starting in July 2023, he observed a clear pattern: Jane Street would buy into heavyweights like HDFC and ICICI just before expiry, pushing the index up and luring retail traders into call options. Then it flipped—offloading those calls, buying puts, and crashing the index for a profit.
He mapped two expiry-day tactics. “Quiet expiries,” where Jane Street flooded the market with options and crushed volatility to kill their value. And “volatile expiries,” where it inflated option prices before triggering massive moves. “It was market choreography,” Bansal told The Hindu and CNBC Awaaz.
By December 2024, he had handed SEBI a full report. Wholetime Member Ananth Narayan met him in Mumbai. Weeks later, SEBI froze ₹4,844 crore and barred Jane Street from trading in India, accusing the firm of distorting expiry-day prices through misleading trades.
It’s distortion
Back in London, Alexander Gerko—founder of global trading powerhouse XTX Markets—had already seen the impact. “Our India options Sharpe ratio went from 10 to 0 overnight,” he wrote in a LinkedIn post.
For months, no one could explain Jane Street’s profits. Then came the SEBI order. “It solves the mystery,” Gerko said. “This isn’t brilliance. It’s distortion.”
He pegged 90% of Jane Street’s India revenues to the now-suspect trading pattern. “It stank. And it wasn’t subtle,” he said.
The traders left, the rivals fell, and the regulator moved. What looked like dominance now reads like design—crafted, timed, and executed until the switch flipped.
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