JPMorgan Unit Resumes India Trading After Paying $311,230 Over Closing-Auction Manipulation Order

India's Securities and Exchange Board lifted a trading ban on a JPMorgan Chase & Co. unit after the firm deposited 29.6 million rupees, about $311,230, into a designated account to comply with a regulatory order, according to Bloomberg and confirmed by CNBC-TV18 and NDTV Profit.

The unit, Copthall Mauritius Investment Ltd., along with Mumbai-based Mansi Share and Stock Broking, had been barred from India's capital markets since August 19. SEBI's interim order accused both firms of manipulating the Bombay Stock Exchange's closing auction session on August 13, alleging Copthall placed aggressive buy orders in Sensex constituent stocks while Mansi placed large sell orders, distorting the indicative equilibrium price used to set closing prices, according to Fortune India and CNBC-TV18. SEBI said the trades benefited options positions tied to the Sensex.

Both firms deposited the alleged unlawful gains last month, according to people familiar with the matter cited by Bloomberg. That deposit satisfied the condition for lifting the ban, but it is not an admission of guilt and does not close the case. SEBI's investigation continues, and the regulator plans to issue a confirmatory order after reviewing formal responses from both firms and holding in-person hearings, Bloomberg reported. Each company was given 21 days to respond to the allegations.

JPMorgan's position: technical, not manipulative

According to Moneycontrol, Copthall plans to argue that any regulatory breach was technical in nature rather than intentional market manipulation, and is unlikely to appeal the order for now. This contrasts with Jane Street Group, another Wall Street firm SEBI has accused of manipulating Indian markets. Jane Street has denied the allegations and is appealing in an Indian court for access to additional documents, according to Business Standard and Moneycontrol. Jane Street has deposited more than $500 million in escrow to comply with its own SEBI order, Business Standard reported.

These are interim orders SEBI issued in August, not final findings of wrongdoing. No confirmatory order has been issued in the JPMorgan case, and the firms have not been convicted of anything. Reasonable people can argue SEBI's fast-moving enforcement, banning firms first and sorting out the details later, puts the burden of proof in an unusual place before any hearing has happened. Critics raise due-process concerns about this approach, even as SEBI's underlying goal, protecting retail investors from options-market gaming, remains sound.

Not JPMorgan's main India business

Copthall is a separate legal entity from J.P. Morgan India Pvt., the bank's SEBI-registered stock broker and merchant banking arm, according to Bloomberg, Business Standard and Moneycontrol. The order against the Mauritian unit does not directly touch JPMorgan's day-to-day operations in India. Copthall's own footprint has been shrinking regardless: its Indian stock holdings fell from more than 55 billion rupees at one point to under 380 million rupees as of June 30, according to data from Trendlyne.com cited by Bloomberg and NDTV Profit.

A broader crackdown on Wall Street in India

Business Standard reported that SEBI has signaled internally it's getting more aggressive toward both domestic and international traders, part of an effort by chairman Tuhin Kanta Pandey to lean harder on technology-driven surveillance. Bank of America and Capital Group have also drawn regulatory scrutiny in India this year, Business Standard reported. New Delhi lawyer Pradyun Chakravarty of King Stubb & Kasiva told Business Standard that SEBI's message is unambiguous: "scale, reputation and global standing offer no shelter from India's market-conduct rules."

The friction traces partly to India's new Closing Auction Session mechanism, introduced this year to set closing prices for more than 200 stocks. CNBC-TV18 and NDTV Profit both reported the rollout has been rocky, marked by wild derivative price swings and manipulation allegations. SEBI said last week it will release a discussion paper on how settlement prices for futures and options contracts should be determined going forward, an acknowledgment that the mechanism itself may need retooling, not just tougher enforcement against the firms trading around it.

A separate fight back home

JPMorgan is also pushing back against U.S. regulators on a different front. Chase Business Bank CEO Stevie Baron warned in a memo obtained by Fox News Digital that proposed changes to the Basel III Endgame capital rules, specifically the Global Systemically Important Bank surcharge formula, could raise borrowing costs for small businesses by encouraging banks to trade rather than lend. Baron oversees more than 7 million small and mid-size business relationships and over $19 billion in average business banking loans in fiscal 2025, according to Fox News. That fight is unrelated to the SEBI case, but it shows JPMorgan simultaneously contesting regulatory pressure on two continents, one over alleged market conduct, the other over how much capital it must hold to keep lending.

The unresolved question in India is whether SEBI's confirmatory order, once issued after hearings with Copthall and Mansi Share, finds the trades were manipulative or merely a technical compliance lapse as JPMorgan's unit intends to argue. Neither JPMorgan nor SEBI's press office responded to requests for comment from Bloomberg.