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SEBI has issued an interim order in which it has confirmed instances of front running by Viresh Joshi, ex-Chief Trader, Axis Mutual Fund and 20 others individuals including employees of broking companies.
The marker regulator has found that these individuals made Rs.30.55 crore wrongfully through front running during work from home set up.
SEBI has asked Viresh Joshi and 20 others to keep Rs.30.55 crore along with accrued interest amount in escrow account in favour of SEBI in any nationalised bank till the matter in sub judice.
SEBI has also directed them to not to access securities markets and prohibited them from buying or selling any securities directly or indirectly. The market regulator has also asked banks and RTAs not to take redemption requests.
In its order, SK Mohanty, Whole Time Member, SEBI said, “I find that the way Mr. 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 approx. 66 lakh unit holders have put an aggregate sum of AUM of Rs.2.52 lakh crore (as on March 31, 2022), it smacks of rampant dishonesty and unfairness on the part of Mr. Viresh Joshi and his accomplices. At a time, when SEBI is extensively engaged in investors education and is taking series of steps to win investors’ faith in the securities market, indulgence in such heinous acts of market manipulation and fraudulent trade practices as have been blatantly displayed by a senior official of a mutual fund like Mr. Viresh 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 securities market. Hence, senior functionaries like Mr. Viresh Joshi discharging sensitive job like that of a Dealer of a reputed mutual fund, when play mischief with the trades of the mutual fund in collusion with his associates as part of a well calculated scheme, the same deserves to be dealt with a firm hand.”
Accused will have to submit their reply to SEBI within 21 days.
