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The Enforcement Directorate (ED) on Tuesday arrested former Chief Executive Officer (CEO) of National Stock Exchange (NSE) Ravi Narayan in connection with the co-location scam.
Narayan was the Managing Director and Chief Executive Officer of NSE from April 1994 to March 31, 2013. Thereafter, he was appointed as the Vice-Chairman in the Non-Executive Category on the Board of the Company from 1 April 2013 to 1 June 2017.
Narayan is accused of illegally tapping the phones of NSE employees between 2009 and 2017. The ED had on July 14 registered a case under PML against Narayan, former NSE chief Chitra Ramakrishna and Mumbai Police Commissioner Sanjay Pandey. The CBI had earlier registered a case against these days.
What is co-location service
Under this service the brokers are allowed to set up their servers in the exchange premises. With the help of this, they can quickly find out the movement in the stock market and can take advantage of it.
It was revealed in the investigation that many brokers took advantage of this fraud and made crores of rupees illegally. The investigation revealed that the algorithm was tampered with.
Chitra Ramakrishna was arrested by the ED last month. He was arrested for money laundering related to illegal phone tapping and spying on exchange employees.
What did ED’s lawyer say in the High Court a week ago?
A week ago, ED’s lawyer NK. Matta had told the Delhi High Court that Narayan and other accused hatched a conspiracy to defraud NSE and its employees. He illegally tapped the phones of the employees of the exchange through Isec Services Pvt Ltd, a company linked to Sanjay Pandey. This was done under the guise of cyber security of NSE.