The CBI arrested former NSE Group Operating Officer Anand Subramanian on 25 Feb 2022 in connection with a 2018 scam case.
The investigation also led to penalties levied against NSE’s former CEO Chirtra Ramkrishna and her predecessor Ravi Narayan.
So, what happened?
Subramanian and several NSE and SEBI officials are alleged to have misused their server architecture in 2018 to give preferential access to a private company ahead of other brokers.
In addition to this, Ramkrishna has been accused of sharing sensitive information including the stock exchange’s financial projections, business plans and board agenda with a mysterious spiritual guru in the Himalayas.
On investigation, the SEBI also noticed irregularities in Subramanian’s appointment as Chief Strategic Advisor to Ramkrishna despite his lack of qualifications– a decision found to be heavily influenced by the purported guru, who was later identified to be Subramanian himself.
NSE has been beset with corporate governance lapses for many years. In fact, most institutions and companies have to deal with fraudulent employees at some point.
But is there a way insurance can help them cope?
Generally, businesses opt for a Fidelity Guarantee Insurance policy to cover themselves against any financial loss resulting from their employees committing theft, embezzlement, forgery, fraudulent conversion, or other dishonest acts.
This insurance can help protect the business’s assets and reimburse it for major losses due to the actions of such employees.
However, it must be noted that this policy would only help NSE if the financial loss can be directly associated with the misconduct of its employees.
After an extensive investigation, the SEBI has levied heavy fines and restrictions on NSE as well as Ramkrishna.