MUMBAI: The CBI is conducting searches on brokers across 10 locations in Mumbai, Gandhinagar, Delhi, Noida, and Gurgaon in connection with the NSE colocation scam.
“Searches are ongoing and are connected with the colocation FIR,” said a source privy to the information.
Among those brokers whose premises were searched included OPG Securities and SMC, TNIE learned.
The colocation case has led to the arrests of former NSE MD and CEO Chitra Ramkrishna and former group operating officer of the exchange Anand Subramanian.
A CBI special court had denied bail to Ramkrishna who was arrested on March 6 and is currently lodged in Tihar jail under judicial custody.
Ramkrishna has moved the Delhi HC for bail after the trial court rejected her application on grounds of the serious governance lapses, which have impacted the image of NSE in the eyes of retail and institutional investors . Delhi HC has sought the CBI's response on her bail plea.
The colocation scam refers to NSE led by Ramkrishna allegedly giving preferential access to certain brokers at its colocation facilities, where server racks were placed next to those of the exchange servers for a fee. The allegation in the FIR is that some of the brokers in collusion with unknown NSE staff were given price feeds before others at the facility, enabling them to gain at the expense of other investors.
The CBI is also probing whether kickbacks were received by the NSE staff for this preferential access.
Broker OPG Securities and Ajay Shah, professor NIFPF, are among those named in the FIR. Shah and one Infotech Financials allegedly received certain confidential trading data from NSE when Chitra was at the helm. It was known that Infotech Financials provided algorithmic software to brokers on NSE and that one of the directors in the firm was the wife of Suprabhat Lala, SVP, NSE, besides being Shah’s sister-in-law.
CBI filed an FIR in the matter in May 2018.