India's securities regulator, SEBI, has banned Copthall Mauritius Investment Ltd., a JPMorgan Chase & Co. unit, from its capital markets, alleging manipulation of the country's new closing auction for stock prices. SEBI impounded 37 million rupees ($386,000) from Copthall and local firm Mansi Share and Stock Broking Ltd., identifying these as wrongful gains. The order states that Copthall and Mansi Share executed manipulative trades during the closing auction window on August 13 to influence the indicative equilibrium price of the BSE Sensex Index, benefiting their options positions. JPMorgan declined to comment, while Mansi Share did not respond to inquiries.
This action is one of SEBI's first major enforcement actions against an international firm for market manipulation since it accused US-based trading firm Jane Street Group of similar misconduct last year. Jane Street Group denied the charges and is appealing the decision in an Indian court, seeking access to additional documents. In a related development, Indian officials recommended denying Jane Street Group LLC's tax treaty benefits with Singapore, suggesting profits in India should be taxed as capital gains. This comes after Jane Street was barred from the Indian stock market in July 2025 by SEBI, which also sought to disgorge 4,843 crore rupees ($582 million) in alleged unlawful gains.
Jane Street is currently seeking correspondence between SEBI and the National Stock Exchange (NSE), arguing these documents are crucial for its defense against market manipulation allegations. The firm claims two earlier reviews in November and December 2024 by the NSE and SEBI's Integrated Surveillance Department, respectively, found no evidence of manipulation. Jane Street alleges a UAE-based hedge fund's complaint led SEBI to initiate a fresh investigation, despite these earlier findings. SEBI has accused Jane Street of distorting the Bank Nifty index by buying large quantities of constituents in cash and futures markets to artificially support the index while simultaneously building short options positions. The regulator’s increased scrutiny comes amid backlash from traders over unexplained spikes in stock benchmarks during closing sessions following the introduction of an auction-based system for over 200 stocks in the $5.1 trillion market.
