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ED arrests Mumbai ex-top cop in NSE phone tapping case


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NEW DELHI: The Enforcement Directorate on Tuesday arrested recently retired Mumbai police commissioner Sanjay Pandey after confronting him with alleged payments of more than Rs 12 crore received from the National Stock Exchange by a firm, iSec Services, which is linked to him in connection with illegal phone tapping of some NSE officials and clients.
Pandey is also being investigated on suspicion of using the tapped phone conversations by some of the accused in the money laundering case who may have benefitted from these illegally recorded conversations. Though Pandey was being evasive, agency officials are trying to establish a money trail between his iSec Services and some NSE clients. Sources said Pandey was also given money by the NSE authorities for auditing the same clients whose phones were allegedly found tapped, a serious charge if proved correct in a money laundering probe that is turning out to be a bigger racket than initially discovered when NSE ex-CEO Chitra Ramkrishna was held.
Pandey was first questioned on July 5 and then again on Monday and Tuesday.
The ED had last week arrested former NSE CEO Chitra Ramkrishna after informing a special court here that the “snooping of phone calls” at the NSE was being done for a long time. Pandey retired from service as Mumbai’s police chief on June 30 and was soon booked by CBI and then the ED in the NSE phone tapping case.
The CBI in its FIR against Pandey has alleged that his iSec Services had conducted audits of two high risk brokers-SMC Global Securities Ltd and Shaastra Securities Trading Private Limited-in a fraudulent manner when the co-location scam was going on.
These brokers came in the category of high risk, as per SEBI guidelines, for using co-location facilities to carry out algorithmic trading in the NSE, it said. The high-risk brokers required a system audit of their algorithmic trading system every six months with an auditor only allowed to conduct three successive audits, the CBI said.
iSec Services Private Ltd, which was founded by Pandey in March 2001, had audited these traders during 2013-19 continuously, breaking the permissible limit of only three consecutive audits, according to the FIR.
Shaastra Securities was audited during the period April 2013-March 19 and SMC Global Securities from October 2012 to September 2015 by iSEC Services in breach of the SEBI circular dated November 6, 2013, it alleged.

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