NSE manipulation case: CBI raids properties linked to Chitra Ramkrishna

“Searchs are being conducted into buildings linked to some stockbrokers who have tampered with the co-location facility provided by NSE with the complicity of its officials,” said an official from the Central Bank of Iraq.

The agency last month filed an indictment against Chitra Ramkrishna, former CEO and managing director of the National Stock Exchange (NSE), and former NSE chief operating officer Anand Subramanian in connection with her case.

The CBI had arrested Subramanian and Ramkrishna in February and March respectively. The agency registered the case in 2018, but the action against the two followed a report from the Securities and Exchange Board of India (SEBI), which charged Ramkrishna with charges of illegally appointing Subramanian and over sharing confidential information. Related to the stock exchange with “Himalayan Yogi”.

On February 11 Ramkrishna has been fined Rs 3 crore by SEBI Alleged violation of rules in the appointment of Subramanian. According to SEBI, many of the key decisions Ramkrishna made during her tenure as Managing Director and CEO of NSE from 2013 to 2016, including the appointment of the Subramanian, was directed by an unidentified yogi, “who may inhabit largely the Himalayan mountain range.” “.

Investigative agencies have yet to verify the true identity of the yogi, although an Ernst & Young audit report indicated that it may have been Subramanian himself.

The CBI case relates to the charge that brokers have given preferential access to the NSE trading system in the form of an on-site shared facility, through which they have purchased “shelf space” for their servers. According to the agency, these merchants gained faster access to the NSE data feed.

The CBI has booked Sanjay Gupta, owner and promoter of Delhi-based OPG Securities Pvt Ltd, among others in the case.

CBI believes that between 2010 and 2014, Gupta allegedly “misused” the NSE server architecture in a criminal conspiracy with officials from the exchange. The FIR states: “…Unknown NSE officials gave OPG Securities Pvt Ltd access to servers that were technologically newer and less crowded at that particular period. This helped OPG Securities Pvt Ltd. that You are often the first to log on to the NSE exchange server.”

The allegations of unfair access were first made by the whistleblower in January 2015. The whistleblower wrote to SEBI, alleging that a few brokers were able to log into the NSE system with better hardware specifications while engaging in algorithmic trading, to their unfair advantage.

Algorithmic trading, or “algo” in market parlance, refers to orders that are generated very quickly using advanced mathematical models that include automated trade execution.

A Technical Advisory Committee report by SEBI later found that OPG Securities consistently logged in first on TBT servers (tab by tab) on most trading days in 2010-2014, and also had access to servers with better hardware. At this point, Gupta allegedly bribed SEBI officials to get a positive in his investigation.

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