Intense Action Against Alleged Rs 200-Crore Insider Trading Scandal Involving Axis Mutual Fund
In a significant development, the Enforcement Directorate (ED) has conducted searches across multiple cities in India, including Delhi, Mumbai, Gurugram, Ludhiana, Ahmedabad, Bhavnagar, Bhuj, and Kolkata, as part of a widening probe into an alleged front-running scam involving Axis Mutual Fund.
The raids, which took place over two days, were initiated following a December 2024 FIR filed by Mumbai Police and form part of the ongoing investigation into the same scam. The ED's investigation has uncovered a network of traders and brokers who are accused of exploiting pre-trade data, generating over Rs 200 crore in illegal profits.
At the heart of the alleged scam is Viresh Gangaram Joshi, the former chief dealer and fund manager at Axis Mutual Fund. Joshi, who was arrested on August 2, is accused of misusing confidential trading information from 2018 to 2021 to execute illicit pre-emptive trades via proxy (mule) accounts, generating illicit profits over Rs 200 crore. He is currently in ED custody until August 8.
The ED's investigation has also revealed that Joshi operated from a terminal in Dubai. During the raids, assets including shares, mutual fund holdings, and bank balances worth Rs 17.4 crore were frozen. Joshi is said to have used mule trading accounts sourced from various brokers.
Front-running, as described in the article, is a serious securities fraud that involves insiders trading using non-public client information for personal gain. The allegations against Joshi involve the misuse of confidential trade information from Axis Mutual Fund. These alleged actions are said to have generated massive illicit profits and cheated retail and institutional investors of the fund, which manages assets worth over Rs 2 lakh crore.
Axis Mutual Fund has clarified that the probe and Joshi’s arrest do not implicate the fund itself or affect its ongoing operations. However, the scam undermines market integrity by disadvantaging retail and institutional investors of the fund.
The ED's investigation is ongoing, with more investigations planned into shell entities and accomplices. Key updates include the fact that over Rs 200 crore illicit proceeds have been detected to date, possibly higher, and that Joshi is described as the key conspirator in the case.
This news article is based on reports from NDTV, the Enforcement Directorate Press Release, The New Indian Express, and the Economic Times.
- The ongoing business investigation by the Enforcement Directorate (ED) into an alleged front-running scam at Axis Mutual Fund also involves general-news categories such as crime and justice.
- The alleged front-running scam at Axis Mutual Fund, which has generated over Rs 200 crore in illicit profits, falls under the category of serious financial misconduct.
