Stock scam: Did some brokers get advance information systematically?

Bengaluru, May 16: Were some members of the National Stock Exchange handing out advance information to some brokers in New Delhi in a bid to ensure that they benefited? A letter written to the SEBI in January 2015 suggests that some brokers were benefitting from advance information being given out to them from the NSE and it goes on to state that the matter be probed.

This fresh controversy comes just a couple of days after it had been found that some brokers had siphoned off funds worth Rs 500 crore from investor accounts to foreign locations.

The letter which has been written to SEBI by a hedge fund manager from Singapore alleges that several members of the NSE have been parting with advance information to brokers so that they are at an advantage while they trade.

Several brokers especially from Delhi have been preferred by members of the NSE and information is being passed on systematically.

Advance information about the markets is being parted systematically which in turn has given some New Delhi based brokers the edge over the others. The letter seeks an investigation into the matter and the SEBI is looking into it.

Give and take:

The allegation is that some NSE members are hand in glove with these brokers. They are giving information on a systematic basis. The extent of money in this give and take operation is not yet known and is a subject matter of investigation.

Under the scanner are those various meetings alleged to have taken place between the members of the NSE and the stock brokers. How and why advance information was being systematically being passed on is also being looked into. Prima facie it appears that there were four brokers who were being handed out this preferential treatment.

This issue was first noticed when some brokers found that their competitors were getting information faster than them. This advance information had put them in an advantageous position. Many claim to have brought it to the notice of the NSE, but have complained of either slow or lack of action.

OneIndia News