Sebi Fines Ex-Axis MF Dealer Viresh Joshi ₹7.5 Cr for Front-Running
By Market Desk
Sebi imposes a ₹7.5 crore penalty on former Axis Mutual Fund chief dealer Viresh Joshi and 20 others for a sophisticated front-running scheme executed between Sept 2021 and March 2022.
The Securities and Exchange Board of India (Sebi) has imposed substantial penalties totaling ₹7.5 crore on Viresh Joshi, the former chief dealer at Axis Mutual Fund, and 20 other individuals. These sanctions address a sophisticated front-running scheme orchestrated by Joshi between September 2021 and March 2022.
Understanding the Front-Running Mechanism
Joshi misused confidential information concerning impending large fund trades, transmitting these crucial details to Dubai-based trader Prijesh Kurani. Kurani then executed trades through a network of conduit accounts, positioning himself to profit.
- Kurani bought or sold securities just before Axis Mutual Fund’s significant buy or sell orders.
- This allowed him to benefit from price movements caused by the fund’s large transactions.
- The scheme ran consistently over six months, impacting numerous market participants.
Severity and Regulatory Action
Sebi’s investigation revealed that the illegal gains from this scheme were conservatively estimated at ₹18.33 crore, a figure notably higher than in comparable cases. The market abuse impacted a vast investor base, affecting approximately 1.28 crore accounts.
Both Viresh Joshi and Prijesh Kurani face a strict ban from participating in the securities market for a period of seven years. This prohibition underscores the regulator’s firm stance against such illicit activities.
Orchestration of the Scheme
Sebi officer Biju S detailed Joshi’s central role in the 146-page order, highlighting his direct involvement in conceiving and orchestrating the entire front-running operation. Joshi’s actions demonstrated a clear intent to manipulate market dynamics for personal gain.
- Joshi conceived and orchestrated the front-running scheme.
- He identified and coordinated with Prijesh Kurani to execute the trades.
- Joshi directed trading activity and facilitated the routing of illicit proceeds.
- Funds were moved through a Dubai-based company to obscure the money trail and avoid detection.