The Madras High Court has admitted a public interest litigation (PIL) seeking to unearth one of the biggest financial frauds in the National Stock Exchange (NSE) co-location case wherein NSE had given preferential access to certain trade members to access NSE trade data at the cost of the entire securities market.
The bench while issuing notice also recorded the petitioner Chennai Financial Markets and Accountability (CFMA) submission. “It is also brought to the knowledge of this court that the CBI has filed the first investigation report in relation to NSE Colo Scam and there appears to be a slow progress in the said investigation and hence came forward to file this writ petition.”
CFMA submitted that the NSE colo scam has tarnished the reputation of a major market infrastructure institution and severely challenged the integrity of the securities market. Millions of investors, mostly retail investors have suffered huge losses due to relatively delayed dissemination of order book data and in the absence of awareness that some select TM’s were able to access the order book data ahead of them, the PIL said.
Though SEBI is having market regulatory mechanism it failed to take any effective steps to unearth the massive scam, which is one of the biggest financial frauds ever taken place, CFMA said.
The bench also issued notices to the Serious Fraud Investigation Office (SFIO) and the Financial Intelligence Unit (FIU).