ED summons ex-Mumbai CP Sanjay Pandey in NSE collocation scam

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ED summons ex-Mumbai CP Sanjay Pandey in NSE roommate scam | PTI

The Delhi Unit of the Law Enforcement Directorate (ED) has issued a summons to former Mumbai Police Commissioner Sanjay Pandey to appear before them in Delhi on Tuesday July 05 in connection of the agency’s ongoing investigation into the co-location of NSE Cas. Pandey, an IPS officer from 1986, retired on June 30.

Pandey did not respond to calls and messages requesting his response.

According to the subpoena issued on Saturday, a copy of which was viewed by the FPJ, said Anil Kumar Monga, Deputy Director, ED, was conducting an investigation under the provisions of the Prevention of Money Laundering Act and considered the presence of Sanjay Pandey necessary in connection with said investigation.

Pandey was asked to appear before ED’s office in Delhi on July 5 and record his statement as part of the investigations into the case.

Colocation is a configuration in which the broker’s computer is located in the same zone as the Exchange’s server. This particular configuration of servers gives brokers using the colocation facility a speed advantage over other brokers. Until 2014, information was disseminated by the exchange server to brokers attached to a co-location facility through a TBT-based system architecture. In this architecture, data was streamed sequentially, so stockbrokers who connected to less loaded servers would gain an unfair advantage.

In April this year, ED carried out searches at several locations in Delhi and Gurugram in connection with the roommate scam case.

A computer company founded by Pandey is believed to be under the Central Bureau of Investigation (CBI) scanner for an allegedly unreported NSE server breach in the co-location scam being investigated by the CBI. Said company was one of the IT companies responsible for conducting security audits at NSE from 2010 to 2015 when the roommate scam is believed to have taken place.

On May 28, 2018, the CBI registered a case of criminal conspiracy, attempt to give and receive a bribe, abuse of official position and destruction of evidence against the owner and promoter of a private company based in New Delhi, unknown SEBI and NSE officials, Mumbai and others unknown. Following this, the ED launched a money laundering investigation into the case.

According to the CBI, it was alleged that the owner and promoter of the said private company misused the NSE server architecture in a conspiracy with unknown NSE officials. It has also been alleged that unknown officials of NSE, Mumbai provided unfair access to the said company using the co-location facility during the period 2010-2014 which enabled it to connect to the server first stock exchange, helping it get the data before any other broker in the market.

The CBI had previously arrested former NSE CEO and Managing Director Chitra Ramkrishna and his adviser and former Group Chief Operating Officer (GOO) Anand Subramanian and OPG Securities Managing Director Sanjay Gupta in the co-location case.

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