Dirty deals worry Sebi, seeks nod to tap phones
Sebi has sought the government's permission to tap phones to monitor stock market investments and prevent manipulation of share prices. Gaurav Choudhury reports. Licensed to snoopbusiness Updated: Apr 11, 2011 01:58 IST
The Securities and Exchange Board of India (Sebi) has sought the government's permission to tap phones to monitor stock market investments and prevent manipulation of share prices.
Sebi chairman UK Sinha has in a recent letter to department of economic affairs secretary R Gopalan sought phone-tapping powers for the capital market regulator and include it among the list of agencies authorised to intercept calls.Sebi has sought powers to access email and call data records from telecom service providers to hasten investigations in suspected cases of share-price manipulation and to prevent "dirty money" from flowing into stock markets, a source said.
"In 2009, an individual invested more than Rs 4 crore in a mutual fund through 25 folios. Some transactions were undertaken in the same scheme on the same day but in different folios. There are several such instances of suspected transactions in stock markets," a central investigating agency source said.
Sebi's request comes amid a swirl of insider trading allegations against US-based hedge fund executive Raj Rajaratnam, in which telephone conversations have been used as evidence.
Sinha's predecessor, CB Bhave, had also written to the finance ministry in 2009 seeking powers to tap telephonic conversations.
But the request was turned down. The department of telecommunications (DoT) wrote back to Sebi in December 2009, saying it was not an authorised enforcement agency for intercepting or monitoring phone calls.
In the past, Sebi has used call records as evidence in its investigations. But these were passed on to Sebi by various agencies.
The source said an inter-ministerial panel drafting standard operating procedures on tapping would look into Sebi's request.