The Central Bureau of Investigation (CBI) has filed a closure report in a case against a company founded by Mumbai's former police commissioner Sanjay Pandey which had allegedly violated Securities and Exchange Board of India (SEBI) norms in auditing two National Stock Exchange (NSE) stock brokers who were using the scam-tainted co-location facility, officials said Tuesday.
In its closure report submitted before a special CBI court New Delhi, the agency is understood to have said it did not find enough evidence to prosecute the accused.
The court has fixed September 14 as the next date for hearing.
The special court may accept the closure, reject it, ask for more investigation or order a trial on the basis of material submitted by the agency, officials said.
The CBI had registered the FIR on May 19 against the company, iSec Services, on a reference from the Enforcement Directorate.
The FIR had red flagged several violations of a SEBI circular by the firm in conducting system audits of stock brokers involved in algorithmic trading using the co-location facility, which is under the CBI scanner now.
The CBI has alleged that 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.
The CBI had earlier arrested former MD and CEO of NSE, Chitra Ramkrishna, in the co-location scam case, they said.
Pandey who had founded the company in 2001 had quit as its director in May 2006. His son and mother later took charge of the company.
The police officer had studied at IIT-Kanpur and Harvard University, and is understood to have established the company after he resigned from service.
His resignation was not accepted by the state government and he rejoined but was not immediately given a posting.
He was made Commissioner of Mumbai Police during the Uddhav Thackeray-led Maha Vikas Aghadi government and later retired.
