In its final report, the Central Agency has stated that brokers’ ITS Ditts- SMC Global Securities Limited and Shastra Securities Trading Private Limited- SEBI circulars conducted by ISEC services were violated, which was established by Pandey.
The agency said that any complexity of the National Stock Exchange (NSE) or Securities and Exchange Board India for India (SEBI) officials allowed the brokers to submit insufficient AUDIT deterrent reports, the agency said.
The CBI registered an FIR against ISEC services regarding the context of the Enforcement Directorate. The FIRA reduced many violations of SEBI standards by Pay FIRM in conducting system audits of stock brokers involved in algorithmic trade using co-location facility.
Under the co-location facility, the NSE allowed brokers to put their servers for charge at the NSE data center, allowing them to cause quick access to the price feed distributed by the stock exchange.
In a separate case, the alleged abuse of facility is being investigated in which former NSE MD and CEO Chitra Ramakrishna was also arrested. He is now out on bail.
The FIR related to the alleged Audit Dit Laps said that when the ISEC services were running a co-location ‘scandal’, fraudulent two “high-risk brokers”, SMC Global and ITS Ditts of Scriptures were carried out.
Pandey founded the company in 2001 and left in May 2006 as its director. His son and mother later took charge of the company.
The Central Probe Agency also submitted its closed report in the case in 2023, but the special court rejected it and directed the agency to conduct further investigation.
After conducting further investigations, the CBI recently filed its closed report, stating that stock brokers had planned with ISEC to avoid third-party ITS details with the aim of hiding their irregular activities. However, due to lack of material, it is not possible to determine the exact nature of illegal activities, the agency said.
The CBI did not find “enough complainant evidence” of the actual settlement of the trading system originating from the audit laps, especially in the absence of a price-volume market abuse of any result such as circular trade and pump and dump.
In a closure report, the agency said that the NSE AUDIT had failed to establish a strong method for verifying the integrity of the reports and lacked the method of strictly implementing the SEBI guide.
Failure to submit strict SEBI guidelines and Audit detection reports, which was just a paper exercise, “cannot be classified as a fraud or forged crime”, he said.
The agency said the NSE and SEBI did not have enough security to ensure compliance with the circulars, which have been violated in the process.
He has made recommendations to consider SEBI president.
Due to the absence of time leg and the true contemporary system ITS Ditts, the evidence is not sufficient to establish except for certain doubts except for reasonable doubt, he said.
On the special court directions to further investigate in 2023, the CBI conducted analysis of trading data and the CALL Log-ISEC of the relevant periods of trading companies dited.
The investigation faced limitations as the SEBI circular, which directed the brokers to maintain call records for three years, was issued on March 26, 2018. However, during the period under investigation, no such legal order exists for SMC Global, from October 1, 2013 to September 30, 2015.
In the case of the Scriptures, there was no question of maintaining the client Call LS GS as it was a proprietary trade company, the agency said.
Protecting the interests of ordinary investors in the securities market “as well as Sebi’s” bounden duty to promote and developing the securities market, and hopefully they will perform their statutory duty for a real purpose, “Special Judge Gagadeep Singh acknowledged a closter report on Monday.
Their acts should not just be on paper; .Lot, strict implementation iswaranted, he said.
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