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I-T Dept Raids Nuvama Wealth, Jane Street Offices over Market Manipulation Probe: Reports
Moneylife Digital Team 31 July 2025
Economy & Nation
The income-tax (I-T) department has launched survey operations at the Mumbai offices of Nuvama Wealth and Investment Ltd, formerly Edelweiss Broking, and US-based trading firm Jane Street, in connection with the ongoing investigation into alleged market manipulation, according to multiple news reports.
 
The raids, which began on 31st July, are part of a broader probe into suspicious trading activity linked to Jane Street, a major global proprietary trading firm that was earlier barred by the Securities and Exchange Board of India (SEBI) for distorting the Indian derivatives market. 
 
According to media reports, tax officials are examining trading records, fund flows and internal communications to determine whether any financial irregularities or tax violations have occurred.
 
Nuvama Wealth served as Jane Street’s on-ground trading partner in India. While the company has not yet issued a public statement, reports suggest the searches are tied to recent regulatory findings that accused Jane Street of manipulating the Bank Nifty index through complex algorithmic trading strategies. SEBI, in its interim order earlier this month, alleged that Jane Street's actions disrupted normal market functioning and granted the firm an unfair advantage.
 
As part of its action, SEBI banned Jane Street and its associated entities from trading in Indian securities and ordered the impounding of alleged unlawful gains amounting to Rs4,843 crore. The firm subsequently deposited the full amount into an escrow account with a scheduled commercial bank before the 14 July 2025 deadline. Following this compliance, SEBI lifted its trading ban on 21 July 2025, allowing the firm to re-enter the Indian markets.
 
Despite the regulatory clearance, enforcement agencies appear to be continuing their scrutiny. The I-T department’s involvement, based on what officials describe as 'specific inputs', signals a deepening probe that goes beyond securities law and into possible tax violations or concealment of income.
 
The fallout from SEBI’s initial action against Jane Street has already had a visible impact on the Indian equity derivatives market. On 17 July 2025, turnover in index options premiums on the National Stock Exchange (NSE) dropped to Rs39,625.77 crore, around 35% lower than the June average of Rs60,605 crore. Volumes have remained muted throughout July, especially on expiry days, suggesting Jane Street’s trading activities had a substantial influence on market liquidity.
 
Shares of Nuvama Wealth Management declined 2.46% Thursday at Rs7,228.55 on the Bombay Stock Exchange, following news of the raids.
 
Jane Street, which operated in both the cash and derivatives segments as a foreign portfolio investor and trading member, had attracted SEBI’s attention after allegations surfaced regarding its trades in Bank Nifty options. SEBI’s order noted the use of highly sophisticated systems that could potentially be used to manipulate market outcomes, a charge Jane Street has not publicly responded to.
 
As of now, neither Jane Street nor Nuvama has commented on the ongoing tax surveys. Meanwhile, SEBI has directed exchanges to continue monitoring any trading activity linked to Jane Street entities and ensure that no manipulation occurs during the pendency of the investigation. The case is shaping up to be one of the most significant crackdowns on market manipulation in recent years, with potential long-term implications for how foreign algorithmic traders operate in Indian markets.
 
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