CBI books Sanjay Gupta, officials NSE, SEBI in co-location case

May 31, 2018, 11:12 IST | IANS

Central Bureau of Investigation (CBI) officials said that the case has been registered against Gupta, his brother-in-law Aman Kakrady, Ajay Narotta Shah and some unknown officials of market regulator Sebi and the NSE

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The CBI on Wednesday registered a case against Sanjay Gupta, owner and promoter of OPG Securities Pvt. Ltd. and others for allegedly manipulating the National Stock Exchange to get the first access to markets when they opened, officials said.

Central Bureau of Investigation (CBI) officials said that the case has been registered against Gupta, his brother-in-law Aman Kakrady, Ajay Narotta Shah and some unknown officials of market regulator Sebi and the NSE.

It was alleged that Gupta abused the server architecture of NSE in conspiracy with unknown officials of NSE.

"Unknown officials of NSE in Mumbai had provided unfair access to Gupta's company using the co-location facility during the period 2010-2012 that enabled it to log in first to the exchange server of Stock Exchange that helped to get the data before any other broker in the market," an official said.

The official also said that after introduction of load balancer during October 2012 while servers of all other brokers were connected to the primary servers of NSE, the owner once again allegedly managed the data centre staff of NSE to get connected to the backup servers.

"Backup servers were with zero load and therefore had provided far better and fast access to the market feed to Gupta's company in comparison to other brokers. Thus, the favour was allegedly shown by unknown officials of NSE to private company by providing market feed first in comparison to other brokers," the official said.

Following the registration of the case, the CBI carried out searches at over seven places in Mumbai, Delhi and Bengaluru which led to recovery of several documents.

The agency further alleged that in order to ensure the favourable report from Sebi in the enquiry carried out it against the role of his company in the misuse of TBT (tick-by-tick) architecture of NSE, influenced the unknown officials of the market regulator through bribery.

The agency also alleged that Shah, a resident of Delhi, was instrumental in exploitation of NSE TBT architecture who collected NSE trade data in year 2005-06 for carrying out research. "And with the help of these data, Shah developed an algo software named 'Chanakya' which was sold to selected brokers including said private company," the CBI said.

The CBI officials said that Gupta, along with his brother-in-law was illegally trading in Dubai, Ghana, Singapore, Hongkong and China through OPG Securities Pvt. Ltd.

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