Capital markets regulator Sebi on Tuesday barred Viresh Joshi, former chief dealer of Axis Mutual Fund and 20 others from the securities market in the matter of front running of the trades of the mutual fund. The regulator found that these entities have collectively earned an aggregate sum of wrongful gains of around Rs 30.56 crore from their trading activities, and directed them to deposit this amount into an interest-bearing escrow account or savings a/c in a nationalized bank within 15 days. “Viresh Joshi has conducted himself as a dealer of Axis MF in conceiving a fraudulent scheme and executing the said scheme so meticulously over a sustained period in collusion with other unscrupulous entities to front run the trades of his very own mutual fund where around 66 lakh unit holders have put an aggregate sum of AUM of Rs 2.52 lakh crore (as on March 31, 2022),” Sebi said in the interim order. Joshi has caused serious breach of trust reposed by the investors/unit holders of Axis MF and can potentially cause further erosion of the trust in mutual funds per se as a medium of investment in the securities market. Front running means usage of non-public information to directly or indirectly, buy or sell securities or enter into options or futures contracts, in advance of a substantial order, on an impending transaction, in the same or related securities or futures or options contracts, in anticipation that when the information becomes public; the price of such securities or contracts may change.
