Madras HC Issues Notice to SEBI in NSE Algo Scam
Moneylife Digital Team 20 August 2018
The Madras High Court, last week, had issued a notice to market regulator Securities and Exchange Board of India (SEBI) in the matter of suspected multi-crore fraud involving employees of the National Stock Exchange (NSE), says a report.
According to a report from Times of India, while admitting a plea filed by advocate A Kumar, the Madras HC directed SEBI to respond to the notice in two weeks. The issue pertains to various offences, including alleged preferential access given by NSE employees to select stock brokers through co-location facility.
When the plea came up for hearing, senior counsel for the petitioner P Wilson was quoted by the newspaper as saying, “The wrongful gains by the select brokers by this illegal preferential access through co-location service of NSE cannot be quantified exactly, but is likely to run into several thousand crore per year over five years as NSE trading volume was 2 to 3 lakh crore per day, and co-location accounted for 25% of the total turnover of NSE by 2014.” 
This fraudulent practice in the NSE co-location scandal is a mother of all insider trading and is of infinite value which should attract the maximum punishment, Mr Wilson added. 
In his petition, Mr Kumar had alleged that the NSE introduced co-location services without approval from the market regulator.
Mr Wilson told the Court, “Although the Central Bureau of Investigation (CBI) had already filed first information report (FIR) in the case against the NSE, independently SEBI also under the Securities and Exchange Board of India Act, should conduct investigation, which has not been done despite representation given by the petitioner on 6 July 2018."   
Free Helpline
Legal Credit