Sebi levies Rs 11-crore fine on eight entities in algo software case

The Securities and Exchange Board of India (Sebi) imposed a penalty of Rs 11 crore on eight entities for violation of corporate governance and wrongful sharing of data by the National Stock Exchange (NSE) for development of software on algorithm trading.

The case dates back to a period between 2009 and 2016 when the exchange engaged with academician Ajay Shah and Infotech Financial Services (where Sunita Thomas and Krishna Dagli were directors).

The Sebi examination also found several instances of conflict of interest with respect to family connections between Shah, Lala, and Thomas.

“Ajay Shah and Infotech, along with its directors, made unfair gains by preparing software related to algorithmic trading at the cost of other investors who did not have access to such software developed on the basis of confidential data shared by NSE,” the Sebi order said.

The regulator had passed an order in 2019 in the same matter where it had imposed market bans on the concerned entities. The order has been challenged before the Securities Appellate Tribunal.