New Delhi, July 13 -- US high-frequency trader (HFT) Jane Street has hired top law firm Khaitan & Co. to defend itself in the case of alleged index manipulation, two people aware of the matter said.

The Securities and Exchange Board of India (Sebi) alleged in an Interim order last week that Jane Street had manipulated the Bank Nifty and Nifty indices over two years by taking outsized trading positions, relative to other market participants, in their cash and derivatives constituents.

According to the regulator, this enabled Jane Street to make unlawful profits of Rs.4,844 crore from trades in weekly Bank Nifty and Nifty options.

"The HFT is very close to closing the loop and is expected to pay the amount as asked by Sebi," said a senio...