SEBI passes final order against 21 entities for front running Axis Mutual Fund trades
SEBI has found 21 noticees, including dealer Viresh Joshi and his associates, guilty of front running Axis Mutual Fund trades. The order imposes disgorgement, penalties, and market access restrictions.
What changed
- SEBI issued a final order against 21 noticees for front running trades of Axis Mutual Fund.
- The noticees include dealer Viresh Joshi and his associates, who traded ahead of large MF orders.
- The order follows an ex-parte interim order and dismisses preliminary objections raised by the noticees.
The read
Front running is the hardest form of market abuse to prove, but SEBI's final order against 21 noticees shows the regulator built a case from trade logs and statements of the dealer who had access to Axis Mutual Fund's order book. Viresh Joshi, a dealer with knowledge of large pending trades, is at the centre of a network of individuals and entities that traded ahead of those orders to capture the price move. SEBI dismissed procedural objections about natural justice and jurisdiction, and the order now imposes disgorgement, penalties, and market bans. For the mutual fund industry, this is a reminder: information barriers are not optional. The order will likely stiffen surveillance at every AMC with a dealing desk.
Primary source: official circular (PDF)