SAT Stays SEBI Orders Against 3 Brokers, 3 NSE Officials

Moneylife Digital Team 06 May 2019

The Securities Appellate Tribunal (SAT) has stayed orders passed by market regulator Securities and Exchange Board of India (SEBI) against three brokerages and three senior officials of the National Stock Exchange (NSE) in the NSE co-location (Colo) or algo trading scam. However, the Tribunal has asked the brokers, GKN Securities, Way2Wealth Brokers Pvt Ltd and OPG Securities to deposit 50% of the penalty amount as security by 20 May 2019. The SAT also stayed SEBI order on barring three NSE officials from holding any position in any market intermediaries for two years.

Last week, SEBI has barred OPG Securities and its directors Sanjay Gupta, Sangeeta Gupta and Om Prakash Gupta from the markets for five years for securing unfair access to NSE’s trading systems. They were also asked to pay Rs15.57 crore along with an interest of 12% from April 2014 onwards.

Both Way2Wealth Brokers Pvt Ltd and GKN Securities were barred by SEBI for one year from accepting any new client. Way2Wealth was asked to pay a fine of Rs15.34 crore along with an interest at 12% from 10 September 2015, while GKN was fined Rs4.9 crore, which it was required to pay along with an interest of 12% from 11 September 2015.

Last week, on Friday, SEBI has allowed the three brokerages to close their open positions in the futures and options (F&O) and currency derivatives segment within two months.

Separately, the Tribunal has stayed SEBI orders that barred Ravi Varanasi, who was head of the business development function at NSE, Nagendra Kumar (head of membership department) and Deviprasad Singh (head of Colo support) for two years from holding any position with a market player.

According to sources, Ravi Varanasi, Nagendra Kumar, Deviprasad Singh and Suprabhat Lala, who at various times headed NSE’s vigilance, compliance, trading and customer relations, are not working with NSE. “While it is not known if the Exchange has issued any order or communication to these people as per the SEBI order, they have stopped working with NSE," the source tells us.

Last week, the market regulator, in a marathon five-order series in the co-location case, came down heavily on NSE and its senior officials, including former managing directors Ravi Narain and Chitra Ramakrishna.

Mr Lala from NSE is barred from holding any position with any market infrastructure intermediaries for two years. Mr Varanasi, NSE’s chief of business development is barred from holding positions in market intermediaries and associating with listed companies for three years in the dark fibre case.

Nagendra Kumar SRVS, head of NSE’s membership department and Deviprasad Singh, head for Colo support at the Exchange, are also barred from holding any position for the next two years. In addition, SEBI has asked NSE to initiate an enquiry under its employees’ regulation against Mr Singh and submit the report within six months.

The colocation or algo scam came to light in mid-2015, when Moneylife wrote about it for the first time, following multiple letters from a whistleblower. For this, NSE had filed a defamation case against us. A single-judge had penalised NSE for Rs50 lakh for having filed a case against us. After filing an appeal against the order, NSE paid up the penalty. Meanwhile, in the wake of the scam, the top brass of NSE had to resign and a new management team took charge.

Officials from SEBI were not immediately available for comment on the SAT stay orders.

Next hearing in both these matters is scheduled for 22 July 2019.

Comments

User

VASANT KULKARNI

3 years ago

THIS MUST BE STOPPED. IF THE REGULATORS FIGHT BETWEEN THEMSELVES ON THE ISSUE OF EGO RATHER THAN MERIT, YOU WILL NOT GET ANY JUSTICE. IT WILL BE CARRIED AWAY NOWHERE.

Mohan Krishnan

3 years ago

Judiciary is for the elites all over the world.
A good lawyer is one who knows the law well. But the best lawyer is one who knows the Judge well.

B. KRISHNAN

3 years ago

This is what happens in our country. Fraudsters and crooks can always get away by employing highly paid lawyers and get orders stayed or reversed permanently! I am reminded of the old saying "We are like that only".

Vaibhav Dhoka

3 years ago

After going through the write up one gets to know why other countries businessman avoid entry in India. Here no one can predict time in judiciary and quasi-judicial bodies. In present case it took 3 & 1/2 years for SEBI order which have put on hold by SAT within 4 days. The result is white callar crime goes down without punishment if one can manipulate the process. Finally ordinary investor or litigant never get justice from the system.