In five separate orders, SEBI has slammed the National Stock Exchange (NSE), it’s two former managing directors Mr. Ravi Narain and Ms. Chitra Ramakrishna and a host of other entities including Professor Ajay Shah and his sister-in-law Sunita Thomas for what is referred to as the co-location scam.
The regulator has noted that NSE has committed a fraudulent and unfair trade practice as contemplated under the SEBI (PFUTP) Regulations. Among other directions, SEBI has asked NSE to pay about Rs. 1,100 Crores to the Investor Protection and Education Fund (IPEF) for favouring a few brokers to make illegal gains by using unauthorised trading software, networks and servers in same room where exchange’s main trading servers were located.
The investigation began in 2015. SEBI had conducted multiple forensic audits and investigations before issuing two huge show cause notices.
For reading the SEBI order, please click here.