The CBI on Saturday conducted searches against brokers at more than 10 locations in different parts of the country in connection with the alleged National Stock Exchange (NSE) co-location scam.
The searches were carried out in Delhi, Mumbai, Kolkata, Gandhinagar, Noida and Gurugram.
Last month, the agency had filed a chargesheet against the former NSE managing director, Chitra Ramkrishna, and its former group operating officer Anand Subramanian.
The CBI arrested Mr. Subramanian in February and, soon thereafter, Ms. Ramkrishna was also arrested. The arrests were made following the Securities and Exchange Board of India (SEBI) order levying fines on the two accused and others on several counts. The Income-Tax Department had also searched their premises in Chennai and Mumbai.
The agency had registered the case in May 2018, alleging that Delhi-based broker firm OPG Securities, owned by Sanjay Gupta, and some others used an algorithmic trading software to get preferential access to the NSE server data during 2010-14, in conspiracy with some data centre staff members. Taking advantage of the then available co-location facility, they also gained quicker data access through the exchange’s secondary server.
The software was developed by co-accused Ajay Narottam Shah on the basis of the exchange’s trade data gathered in 2005-06 ostensibly for the purpose of research work. It is alleged that the data was shared with Infotech Financial Services Private Limited and Mr. Shah; despite that, the company provided the algorithmic software to various brokers in the NSE.
The probe in the case took a new turn when the agency scrutinised the email exchanges between Ms. Ramkrishna and a “Himalayan yogi”, on whose directions she had allegedly taken several key decisions. They included Mr. Subramanian’s appointment of as the chief strategic adviser, his redesignation as group operating officer and huge salary increments for him in quick successions, it is alleged.
The CBI accused Mr. Subramanian of creating the email ID “rigyajursama@outlook.com” through which the unknown “yogi” communicated with Ms. Ramkrishna and got the NSE’s confidential papers from her. The agency retrieved about 2,500 email exchanges and also contacted Microsoft for further technical assistance.
The co-location scam was initially reported to the SEBI by a whistleblower in January 2015.
