ED arrests ex-top cop Sanjay Pandey in NSE co-location case

The Enforcement Directorate on July 19 arrested former Mumbai Police commissioner Sanjay Pandey in the NSE co-location case.

The ED action against Sanjay Pandey comes five days after the agency took former NSE managing director and chief executive officer Chitra Ramakrishna under its custody.

The anti-money laundering agency had registered a case against Pandey and Ramakrishna, along with another former NSE chief Ravi Narain under criminal sections of the Prevention of Money Laundering Act (PMLA) on July 14.

This was preceded by the Central Bureau of Investigation (CBI) booking the trio for allegedly tapping phones of NSE employees between 2009 and 2017.

The CBI alleged that Narain and Ramkrishna had roped in a company founded by Pandey to snoop on the stock market employees by illegally intercepting their phones callsas per sources.

The alleged irregularities of secret surveillance were detected by the ED, which reported it to the Ministry of Home Affairs. The MHA subsequently asked the CBI to probe the charges, officials told the news agency.

During its investigation, the CBI found that a journalist introduced Pandey to Ramakrishna, after the former started his own company after quitting IPS.

The CBI was likely to question the journalist, who is based in Mumbai in connection with the illegal phone tapping case, according to sources in the agency who spoke on condition of anonymity.

The co-location scam refers to the case in which the then NSE brass are accused of providing a bunch of high frequency traders unfair access to speed up algorithmic trading.

In 2008, around a dozen companies had applied with NSE for an internal audit contract. This included Pandey's firm. Later, his company signed an agreement with NSE on cyber vulnerability, for which it charged Rs 4.5 crores from the exchange.

According to top sources in the federal investigation body, the former NSE top brass, in the name of cyber vulnerability, asked Pandey's firm to tap phones of employees of NSE.

The company installed tapping machines in the line incoming booth and took possession of all incoming and outgoing calls, the CBI sources said.