The CBI has arrested Sanjay Gupta, owner, and promoter of Delhi-based OPG Securities Pvt. Ltd, in connection with the NSE co-location scam in which brokers allegedly abused the facility to make gains by getting early access to the stock market, officials said on Wednesday.
The agency has already arrested Chitra Ramkrishna, former CEO and Managing Director of NSE, and Anand Subramanian, former Group Operating Officer of the market, they said.
Gupta was arrested here on Tuesday night, four years after the agency had registered the FIR in the Co-location scam case against him and his company.
Mr. Gupta was one of the accused persons named in the First Information Report (FIR) registered by the CBI in May 2018. As alleged, broker firm OPG Securities was one of the beneficiaries that used an algorithmic trading software to get preferential access to the NSE server data during 2010-14, in connivance with some data center staff members. The then-available co-location facility was also abused to gain quicker data access through the exchange’s secondary server.
About a month ago, expanding the ambit of the probe, the agency conducted searches on the premises of several suspect stock brokers in Delhi, Mumbai, Kolkata, Gandhinagar, Noida, and Gurugram.
Investigations in the case recently took a new turn when the CBI examined the email exchanges between Ms. Ramkrishna and an unknown “Himalayan yogi”, on whose instructions she had allegedly taken various key decisions.
They included Mr. Subramanian’s appointment as the chief strategic adviser, his redesignation as group operating officer, and huge salary increments for him in quick successions.
The CBI alleged that Mr. Subramanian had created the email ID “email@example.com” through which the “yogi” was in contact with Ms. Ramkrishna and received the NSE’s confidential documents from her.
The agency has already arrested Chitra Ramkrishna, former CEO and Managing Director of NSE, and Anand Subramanian, former Group Operating Officer of the market.
The agency was also probing unidentified officials of the Securities and Exchange Board of India (SEBI) and the National Stock Exchange (NSE), Mumbai, and other unknown persons.
The probe has also revealed that the brokerages under the scanner allegedly used one of three routes to get preferential access.
This includes securing early access, use of dark fiber, and those who got access through a secondary server.
In May, the federal agents raided at least 10 brokerages to investigate if they had used any one of the three routes to secure preferential access to NSE servers.
The sources also said that the current line of investigation will also help ascertain the role of public servants, especially those in the finance ministry, in allowing preferential access.
The agency is probing if these brokerages violated norms while getting these facilities.
The NSE was then using the so-called tick-by-tick (TBT) server protocol to relay data to members.