US-based trading firm Jane Street faces a tax dispute with Indian authorities, escalating to Supreme Court for “legal privilege” clarity. It seeks protection for confidential private communications, resisting disclosure of internal emails and documents amid tax inquiry.
NEW DELHI: US-based trading firm Jane Street is currently engaged in a tax dispute with Indian authorities and has escalated the matter to the Supreme Court. The company is seeking a clear definition of “legal privilege,” specifically regarding which private communications should remain confidential and not be disclosed to investigators.
This issue has arisen amid a tax inquiry, during which officials are reportedly attempting to access certain internal emails and documents from Jane Street. The firm operates in India and internationally through subsidiaries and funds registered with the Securities and Exchange Board of India (SEBI).
It asserts the need for clarity on whether specific legal discussions, particularly those involving in-house counsel, should be protected from scrutiny.
Central to this case is the Bharatiya Sakshya Adhiniyam (BSA), 2023, which replaced the previous Evidence Act. This new law delineates the types of lawyer-client communications that are shielded from disclosure. The Supreme Court has previously indicated that while some internal legal communications may be deemed privileged, this protection does not extend to routine emails between company officials.
Jane Street is now requesting the Supreme Court to reassess that interpretation and clarify its applicability to their situation. The Court has accepted the firm’s petition and scheduled a hearing for March 25.
The case involves SEBI’s allegations that the trading firm partook in market manipulation by artificially influencing Bank Nifty index levels to benefit from options trading. Although SEBI flagged these alleged manipulations in 2025, the investigation was initiated after Jane Street filed a lawsuit in 2024 against rival Millennium Partners, accusing it of stealing trade secrets, an action that highlighted the firm’s trading strategies in the Indian market.
Following the 2024 investigation, SEBI alleged that from 2023 to 2025, Jane Street executed large trades in the cash market on expiration days to manipulate index prices. The regulator claims that from January 2023 to March 2025, the firm distorted the Bank Nifty index on 18 expiration days, resulting in significant losses for retail investors.
SEBI instructed the company to deposit over Rs 4,800 crore in alleged illegal gains. Jane Street complied, depositing the amount into an escrow account in July 2025, while it continues to challenge the accusations.
After this payment, SEBI lifted the temporary trading restrictions that had been imposed on the firm.