Ex-Mumbai top cop, former NSE CEO booked in phone-tapping case
The Central Bureau of Investigation (CBI) has registered a fresh FIR against former Mumbai Police Commissioner Sanjay Pandey and former MD and CEO of the National Stock Exchange (NSE) Chitra Ramkrishna. They have been booked for the alleged phone-tapping of NSE employees by Pandey's information technology company, officials said. Another former NSE CEO and MD, Ravi Narain, has also been named in the case.
- Since 2018, the CBI and Enforcement Directorate were investigating a co-location scam case, involving allegations of preferential access to some brokers via the NSE's co-location facility—where brokers can buy "rack space" for their servers—giving them faster, unfair access to the market data.
- It is alleged that some brokers, in collusion with insiders, took advantage of the algorithm and the co-location facility to profit themselves.
The CBI is conducting raids in Mumbai, Pune, and other places on Friday in this connection after an FIR was lodged based on Home Affairs Ministry's instructions under the Illegal Phone Tapping Act. Reports quoted CBI sources as saying that during 2009-17, the phones of NSE employees were illegally tapped by Ramkrishna and that Pandey's iSec Securities Pvt. Ltd. helped her do so.
On the other hand, the Enforcement Directorate (ED) interrogated Pandey in connection to the NSE's co-location scam on Tuesday. Notably, iSec Securities was incorporated by Pandey in March 2001 and he quit as its director in May 2006. His son and mother took over the charge of the company. Ramkrishna and former NSE COO Anand Subramanian were arrested earlier this year in this matter.
To recall, the SEBI penalized Chitra Ramkrishna with a Rs. 3 crore fine in February for allegedly violating many guidelines during her tenure, including Subramanian's appointment. It said Ramkrishna was influenced by an unidentified Yogi in numerous significant decisions taken during 2013-16. The Yogi's true identity has yet to be determined by investigators. However, an audit report indicated that he may be Subramanian himself.
The NSE co-location scam was flagged by the SEBI in 2018. The scam involved India's biggest bourse providing some high-frequency traders access to speed up algorithmic trading. The traders were illegally given access to the NSE's server architecture through a "co-location" facility, which allowed them to log in before others. Some officials of NSE and SEBI were also involved in the scam, reports said..