NSE Algo Scam: “Why Is a Forensic Firm Like E&Y Incapable of Drawing Conclusions from Obvious Findings,” asks SEBI’s Technical Advisory Committee
The technical advisory committee (TAC) of the Securities & Exchange Board of India (SEBI) came down heavily on the attitude of Ernst & Young (E&Y) during a meeting held on 14 June 2018 at New Delhi to discuss the revised E&Y report on the infamous high-frequency trading (HFT) scam, or algo scam, of the National Stock Exchange (NSE). Present at the meeting were Madhabi Puri Buch, whole-time member of SEBI; Manoj Kumar, chief general manager, and three other officers of SEBI. TAC is headed by Prof Dr Ashok Jhunjhunwala.
E&Y was appointed to examine in detail the allegations of a whistleblower that, in 2014, some brokers were consistently allowed to log into the co-location servers of the NSE ahead of others, following a breakdown in systems and due processes at India’s largest stock exchange. The E&Y report followed two other investigations: by an expert committee appointed by TAC in late-2015 and one by Deloitte, appointed by the NSE in late-2016.
According to the minutes of the meeting, the TAC chairman reviewed the revised reports submitted by E&Y and observed that E&Y, during its forensic audit, has found “additional evidence in terms of data, email...