Former Mumbai CP Sanjay Pandey reaches ED office after being summoned in NSE co-location scam

Former Mumbai Police Commissioner Sanjay Pandey, on Tuesday, arrived at the Enforcement Directorate (ED) office in Delhi, after being summoned in connection with the National Stock Exchange (NSE) co-location scam. Pandey, a 1986 batch IPS officer retired from service on June 30.

According to the summons issued on Saturday, a copy of which was accessed by FPJ, stated Anil Kumar Monga, Assistant Director, ED, was making an investigation under the provisions of the Prevention of Money Laundering Act and considered the attendance of Sanjay Pandey necessary in connection with the said investigation.

Co-location is a set-up wherein the broker's computer is located in the same area as the server of the Stock Exchange. This particular set up of servers gives a speed advantage to the brokers availing the co-location facility in comparison to other brokers.

Till 2014, information was disseminated by exchange server to the brokers attached with co-location facility through TBT-based system architecture. In this architecture, data was disseminated in a sequential manner whereby stock brokers who connected to servers with lesser load would gain an unfair advantage.

An IT firm founded by Pandey is reportedly under the Central Bureau of Investigation (CBI) scanner for allegedly not red-flagging NSE server breach in the co-location scam being investigated by CBI. The said firm was one of the IT companies tasked with conducting security audits at NSE from 2010 to 2015 when the co-location scam is suspected to have taken place.

On May 28, 2018, the CBI registered a case of criminal conspiracy, attempt to give and receive a bribe, misuse of official position and destroying evidences against the owner and promoter of a New Delhi-based private company, unknown officials of the SEBI and the NSE, Mumbai and other unknown persons. Following this, the ED launched a money laundering investigation into the case.