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NSE co-location scam: CBI arrests Sanjay Gupta of OPG Securities
Sanjay Gupta, managing director of Delhi based stock-broker firm – OPG Securities Pvt Ltd and the main accused in the NSE co-location scam was arrested by CBI on Tuesday.
The Central Bureau of Investigation (CBI) on Wednesday arrested Sanjay Gupta, managing director of Delhi based stock-broker firm – OPG Securities Pvt Ltd, in its probe into the National Stock Exchange (NSE) co-location scam, in which the bourse’s former chief executive officer (CEO) Chitra Ramkrishna is already in jail.
Gupta was named in the CBI’s FIR (first information report) in the NSE case in 2018 itself but was arrested for the first time on Tuesday.
The businessman had allegedly misused the architecture of co-location — a facility offered by the NSE where brokers could place their servers within the stock exchange premises giving them faster access to the markets.
The central agency had carried out raids at Gupta’s premises on Tuesday after which he was arrested.
An official, requesting anonymity, said Gupta had managed to get access to a Mumbai-based syndicate to allegedly influence the officials of Securities and Exchange Board of India (Sebi) officials who are investigating the NSE co-location scandal.
These syndicate members had assured Gupta of managing Sebi officials on his behalf, the officer added.
Another officer claimed that they had information about Gupta that he was planning to destroy key evidence in the case because of which he was arrested.
Sanjay Gupta is one of the main beneficiaries of the co-location facility started by NSE which helped him get favourable access to the market over other brokers through multiple logins and access to secondary servers giving him crucial time advantage and resulting in a multi-fold increase in profits of his company in just two years.
CBI probe has revealed that between 2010 and 2015, when Ramkrishna was managing the affairs of NSE, OPG Securities had connected to the secondary POP server of NSE on 670 trading days in the Futures & Options segment.
OPG and several other brokers had access to the server architecture (tick-by-tick) of the NSE between 2010 and 2015, enabling them to log-in first to the server and get the data split-second faster, getting “an unfair advantage”.
Besides, the brokers were allegedly permitted to connect to the backup servers with very little load, and therefore, were given far better access to the market feed.
Ramkrishna was appointed as joint managing director of the NSE in 2009 and continued on the post till March 2013, with the power of MD, according to CBI. Thereafter, she took over as MD and CEO on April 1, 2013 and remained there till 2016. It was during this period that co-location was started by NSE. The agency placed her under arrest on March 6 while Anand Subramanian, former group operating officer (GOO) of NSE, was arrested on February 25.
As reported by HT on May 22, about a dozen brokers are under CBI scanner for misusing the co-location facility.
The sleuths are also investigating the role of several Sebi and NSE officials who have given unfair advantage to the brokers.
