The CBI informed the Delhi High Court Wednesday that it has broadened the scope of probe into the National Stock Exchange co-location scam and is looking into the aspect of criminality by public or private players in the misuse of NSE data.
The CBI's submission came in a status report filed on the scope of the investigation in the case.
NSE co-location facility allows stock brokers to take on rent specific racks and co-locate their servers and systems within the exchange premises.
The scam relates to alleged market manipulation in connivance with some NSE officials. It was alleged that select stock brokers obtained market price information, ahead of the rest of the market, enabling them to make wrongful gains running into hundreds of crores.
Alleged lapses in high-frequency trading offered through NSE's co-location facility came under the scanner of the markets watchdog Sebi after a complaint was filed in 2015.
The primary objective of co-location services of the NSE is to reduce latency for connectivity to the exchange's trading systems for Direct Market Access (DMA), Algo trading and Smart Order Routing (SOR).
An FIR was lodged by CBI in 2018 for the alleged offences of criminal conspiracy, destruction of document or electronic record to prevent its production as evidence under the IPC and various provisions of the Prevention of Corruption Act and Information and Technology Act.
The matter came up for hearing before a bench of Justices Siddharth Mridul and Anu Malhotra on Wednesday.
The bench was hearing a petition filed by Shantanu Guha Ray, who had given a complaint to the CBI in August 2017 contending that NSE had allegedly abused its market position and helped deviant brokers and politicians to make illegal gains, thereby rendering the institutional set up of exchanges itself at risk.
Senior advocate Mahesh Jethmalani, appearing for Ray, sought to withdraw the petition in view of the status report filed by the CBI on its investigation.
The court said the "petition is dismissed as withdrawn".
On being asked by the bench whether CBI was investigating Ray's complaint, the agency's lawyer responded in affirmative.
The bench was informed by CBI special standing counsel Anil Grover that the case is presently under investigation which is being carried out within the contours of allegations mentioned in the FIR.
"However, in case any additional fact emerges against any public servant of SEBI/ NSE/ any department/ ministry or any other private persons/ public servant irrespective of office he was holding during the relevant period, if found part of the conspiracy/ offence, the same fact shall be investigated thoroughly in accordance with law," the CBI said.
"Any fraudulent act or any commission/ omission of act resulted in wrongful gain to anyone or wrongful loss to anyone committed by any public/ private person, irrespective of the fact that he is named in the FIR or not, shall be examined during investigation," the status report said.
It added that the investigation of the case is vast, broad and deep to look into criminality by public/ private players and misuse of data of NSE in the name of research purpose. The investigation would be carried out in respect of any private person and public servant of any rank found involved in the conspiracy, it said.
The CBI added that the investigation of the case is not restricted to the persons and company who are named in the FIR and the role of each and every public servant/ private person and entities found involved in the conspiracy/ offence will be investigated for taking further necessary action under the ambit/ provision of law.
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