The Great NSE Data Heist: How The Masterminds Walk Free
"I have a TBT line and I am able to process it faster than others. Can we do latency-based arb?”It was not a throwaway remark. It was an email written in 2011 by Krishna Dagli to Suprabhat Lala, a senior official at the National Stock Exchange (NSE). On the surface, the line may seem technical, the kind of jargon-laden chatter that fills the inboxes of market insiders. But in reality, those 16 words were a confession — a direct acknowledgment of a secret pipeline into India’s financial crown jewel.
That email, like several others before and after it, forms part of a damning paper trail that should have brought down one of the most audacious financial conspiracies in modern India. Tick-by-tick (TBT) data from the NSE — the purest, most valuable stream of trading information — was being siphoned, repurposed, and exploited by a small syndicate led by economist Ajay Shah, his wife Susan Thomas, and her sister Sunita Thomas. This was not research. This was not an academic inquiry. This was theft: systematic, deliberate, and breathtaking in scale.
SEBI’s Technical Advisory Committee, in a report summarized in Parliament in 2016 and cited in the Deloitte forensic audit, concluded that the TBT architecture was ‘prone to manipulation’ because of sequential dissemination.
And yet, in 2025, after nearly a decade of investigations, the Central Bureau of Investigation (CBI) filed a closure report. Despite the incriminating emails. Despite the Income Tax Department’s thousand-page appraisal. Despite SEBI’s own findings of illegal access. The case has been closed, the accused absolved, and India’s investors left betrayed.
This is the anatomy of a data heist. And the anatomy of a collapse — not of a stock market, but of accountability itself.
The Whisper Network of Emails
The story begins much earlier, in 2006, with another casual email.
“We have gathered a fairly good amount of tick data over a period of 9 months… Can you please suggest what kind of things we can do with these TBT data and R?”
This line, sent by Dagli to Ajay Shah, was not a naïve student asking a professor for advice. It was the opening of a channel, a doorway into the world of algorithmic trading before the rest of India had even heard of the phrase. Shah, a respected academic and a consultant to the Finance Ministry during the UPA years, was not supposed to be anywhere near this proprietary data. Yet, the emails show he not only had it — he was mentoring others on how to weaponize it.
This was not just boastful chatter. It aligned almost exactly with SEBI’s later finding: “the architecture of NSE with respect to dissemination of tick-by-tick … was prone to manipulation or market abuse” (SEBI comment to Parliament, 2016).
By 2009, the secrecy was explicit. Shah wrote to his associates:
“But you have to swear everyone to silence on the fact that the data that we are getting out of NSE for VIX (volatility index) and LIX (liquidity risk index) is being used for algorithmic trading work — it would be a severe problem if this fact comes to light since NSE has not given anyone else this data.”
This was not a slip. It was a written admission that data was being misused, that others had no access, and that the NSE’s rules were being broken.
Emails like these should have been the prosecutor’s dream — a trail of confessions, each more incriminating than the last. But instead of becoming the foundation of a criminal case, they were ignored, diluted, and eventually buried.
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The Curtain Rises: A Cast of Insiders
At the heart of this scheme was a tightly-knit syndicate:
Ajay Shah: Economist, policy advisor, consultant and insider to the Finance Ministry.
Susan Thomas: His wife, a research professor at IGIDR, co-architect of the strategies.
Sunita Thomas: Susan’s sister, running Infotech Financials (IFPL), the vehicle through which data and strategies reached the market. residing at the same address at the IGDR campus as Susan Thomas.
Suprabhat Lala: NSE official, Sunita’s husband, the man who kept the doors open
In the early 2000s, Ajay Shah was no ordinary academic. A consultant to the Finance Ministry during the Congress-led UPA regime, he moved in the rarified circles of India’s financial elite. His wife, Susan Thomas, armed with a fake PhD degree acted as a research professor at the Indira Gandhi Institute of Development Research (IGIDR), was his intellectual partner, their minds sharp and their ambitions sharper.
Together with Susan’s sister, Sunita Thomas, married to NSE senior official Suprabhat Lala, they formed a formidable trio—a syndicate with unparalleled access to the NSE’s inner sanctum. Picture them as the architects of a grand heist, not of gold or jewels, but of something far more valuable in the digital age: data. Their weapon? A pipeline of secret TBT data, the lifeblood of the stock market, offering real-time insights into every trade, every price, every order waiting to be executed.
This wasn’t a smash-and-grab job. It was a slow, deliberate siphoning, orchestrated with the precision of a symphony. Shah’s 2009 email, with its plea for secrecy, reveals the stakes: the data—covering the volatility index (VIX) and liquidity risk index (LIX)—was being funneled into algorithmic trading systems, giving Shah’s network an edge no other market player could dream of. The email wasn’t a one-off; it was a window into a decade-long operation that began as early as 2006, when Shah and his associate Krishna Dagli exchanged messages about exploiting TBT data.
The stage was set, and the NSE, wittingly or not, became their unwitting accomplice.Together, they exploited their access to the NSE not for academic research, but for market advantage. Through IFPL some received trading strategies that gave them a head start — milliseconds faster than the competition, but enough to mint fortunes.
The emails tell the story with chilling candor. Shah directed Sunita in 2009 to deploy a staffer named Anupam to work on “trading strategies, which can go into all algorithm trading work.” Dagli boasted in 2011 of having a TBT line faster than others. This was not a random leak. It was an organized pipeline, flowing for more than a decade and Shah, his wife Susan Thomas, and her sister Sunita Thomas allegedly orchestrated a brazen scheme to siphon off sensitive trading data from NSE, India’s financial crown jewel.
Yet, in a plot twist that defies belief, India's most premier investigative agency CBI, tasked with bringing the culprits to justice, has stumbled spectacularly, filing a closure report in 2025 that leaves the masterminds uncharged. This is a story of ambition, insider access, and a shocking betrayal of trust, where the CBI’s failure casts a long shadow over India’s financial integrity.
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The Digital Goldmine
To grasp the magnitude, imagine a river of gold running under the NSE’s trading floor — a stream of tick-by-tick market data, every price, every order, every cancellation, captured in real time. That data was meant to be guarded, shared with no one until 2017–18, when SEBI finally mandated equal access.
But Shah’s network was drinking from that river as early as 2006. For more than ten years, they had exclusive, illicit access to what every trader in the country would have killed for.
Emails prove they knew what they had. “Can we do latency-based arb?” Dagli asked. Latency arbitrage — exploiting tiny delays in market data — is the holy grail of algorithmic trading. The answer was obvious: yes.
This wasn’t research. This was robbery — but of data, not cash.
SEBI’s Soft Touch, NSE’s Silent Complicity
The Securities and Exchange Board of India (SEBI) did investigate. It found that Ajay Shah had been receiving data from NSE under so-called “research agreements.” But the agreements were undated, unnotarized, and legally worthless. But a SEBI Whole Time Member dismissed them as “reams of paper devoid of legal value.” Yet SEBI stopped short of calling them fraudulent.
The complicity of NSE’s top brass—former MD Ravi Narain and Chitra Ramakrishna—added fuel to the fire. Narain and Ramakrishna, per SEBI’s findings, facilitated data transfers to Shah under the guise of research, with no formal agreements in place until 2012. Even then, the agreements were dubious—lacking dates, notary attestations, or legal validity. The exchange’s chief technology officer, Ravi Apte, admitted to SEBI that he shared data with Shah on oral orders from his bosses, under the mistaken belief that a confidentiality agreement existed. The NSE’s lax oversight was a gaping wound, and Shah’s network exploited it with surgical precision.
Susan Thomas, though central to the scheme, walked away untouched. Despite her fingerprints being on every stage — from access to analysis to strategy design — SEBI’s final orders barely mention her. The NSE itself faced little more than a regulatory rap.
This was leniency dressed as enforcement, an abdication that set the stage for the CBI’s challenges in pursuing the case further.
The Smoking Gun and the Collapse
The Income Tax Department had done the heavy lifting. Its 1,000-page appraisal report chronicled Shah’s possession of sensitive cabinet papers, his alleged violations of the Official Secrets Act, his emails lobbying for controversial figures, and, most damningly, his role in the NSE data siphoning.
The CBI had it all. The emails. The appraisal report. SEBI’s findings.
And yet, in 2025, the agency filed a closure report. No charges. No arrests. No accountability. In its 2025 closure report, the CBI claimed it found “insufficient material to establish criminal intent” and “no evidence of actual compromise of the trading system”.
Earlier, the Delhi High Court had critiqued the CBI’s initial chargesheet in the matter for lacking strength and procedural lapses. But this time, the court accepted the closure, stating: “the data available … does not establish any trading pattern of the trading members which is worthy of reporting …” (Rouse Avenue Court order, August 25, 2025). In other words: the emails, the architecture flaws, the advisory reports, the I-T findings — all of it was deemed insufficient to move forward.
Was the case’s closure a reflection of the complexity of financial crimes, or did the evidence fall short of the threshold for prosecution? The question lingers for those seeking answers. When a signed confession lies in the open, and the detective chooses to walk away, what conclusion can the public draw?
A Web of Influence and Secrets
Shah’s influence extended beyond the NSE. The I-T report alleges he held sensitive government documents, including cabinet notes, in violation of the Official Secrets Act (OSA). These documents, which could sway stock prices, were found in his possession during raids, alongside emails detailing his lobbying for controversial figures like Umar Khalid and entities like Religare Healthcare Insurance. One email even claims Shah met senior bureaucrats to “save Khalid from being framed.” This wasn’t just a data heist; it was a power play, with Shah leveraging his insider status to bend markets and policy to his will.
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The Market Betrayed
Emails, those silent witnesses of the digital age, told the whole story. From Dagli’s boast of a TBT line, to Shah’s plea for silence, to the blueprints of trading strategies — the evidence was there.
But the institutions charged with defending market integrity failed spectacularly. SEBI’s half-measures, NSE’s complicity, and the CBI’s closure report combined to turn an open-and-shut case into a ghost story.
For investors, the lesson is chilling: the biggest heists don’t happen in vaults. They happen in emails. And in India’s greatest financial betrayal, the masterminds didn’t just steal data — they stole the promise of a fair market.
The CBI’s failure ensures that Ajay Shah and his network walk free, their secrets intact, their legacy rewritten. But the unanswered emails remain, echoes of a conspiracy that should have shaken the very foundations of Indian finance.
“I have a TBT line and I am able to process it faster than others. Can we do latency-based arb?”
The question was asked. The answer, tragically, was yes. And the CBI, tasked with pursuing justice, concluded its investigation without further action. The outcome of the investigation leaves the NSE data heist as a cautionary tale of unchecked power and unresolved questions.
Citations:
1) Algo trading scam and Ajay Shah’s NSE links (Hindu Businessline: December 07, 2021)
2) NSE co-location scam: Ajay Shah being probed for possessing documents under Official Secrets Act (Hindu Businessline: June 22, 2022)
3) PMO clean-up uncovers official connections of NSE co-location masterminds (Sunday Guardian: June 25, 2022)
4) Inside the cosy club at NSE (February 15, 2022)
5) How CBI Bungled Up The NSE Scam Probe (BW Businessworld: November 21, 2023)
6) Sebi: Pity, Failure & Conflict (BW Businessworld: September 21, 2024)
7) Thou Shall Misjudge: Sebi's Co-location Verdict (BW Businessworld: September 21, 2024)
8) The Market Mafia: Chronicle of India's High-Tech Stock Market Scandal & The Cabal That Went Scot-Free (November 7, 2020)
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