Axis MF front-running case: Sebi bars former MF dealer Viresh Joshi for 7 years, imposes ₹3 crore penalty

The Securities and Exchange Board of India (Sebi) on Friday barred Viresh Joshi, former chief dealer at Axis Mutual Fund, from accessing the securities market for seven years and imposed a ₹3 crore monetary penalty for his alleged involvement in a front-running case.

In its final order, the capital markets regulator also penalised 20 other individuals linked to the matter. They have been barred from the securities market for periods ranging from three to seven years, while monetary penalties imposed on them range from ₹10 lakh to ₹1 crore, depending on their role in the alleged violations.

The action follows an interim order-cum-show cause notice issued by Sebi in February 2023, after an investigation into suspected front-running activities involving trades executed on behalf of Axis Mutual Fund.

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According to the regulator, the alleged front-running transactions took place between September 1, 2021, and March 31, 2022. Sebi had earlier estimated that the accused collectively made wrongful gains of around ₹30.55 crore, which were subsequently impounded through the interim order.

Front-running is an illegal market practice in which a person trades in securities based on advance knowledge of large institutional orders, enabling them to profit from the expected price movement once those orders are executed.

In the final order, Sebi clarified that the period during which the individuals have already remained barred from the securities market under the interim directions will be adjusted against the duration of the debarment imposed now. This means the restraint period already undergone since the February 2023 interim order will be counted while calculating the remaining ban.

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