- SEBI found former Axis MF dealer Viresh Joshi ran a front-running scheme earning Rs 30.56 crore
- Joshi leaked confidential trade info from Sept 2021 to Mar 2022 to associates for profit
- Dubai-based Prijesh Kurani coordinated trades using nine mule accounts and shared info remotely
The Securities and Exchange Board of India (SEBI) has concluded that former Axis Mutual Fund chief dealer Viresh Joshi orchestrated a front-running scheme that generated unlawful gains of Rs 30.56 crore by leaking confidential trade information and executing trades ahead of the fund house's transactions.
In its final order, the market regulator found that Joshi, who was responsible for executing trades on behalf of Axis Mutual Fund, passed on unpublished and price-sensitive trade information between September 2021 and March 2022 to a network of associates, enabling them to profit from impending mutual fund transactions.
According to SEBI, confidential trading information from Axis Mutual Fund was shared with Dubai-based conspirator Prijesh Kurani, who then coordinated trades through a web of accounts before and after the mutual fund's orders were executed in the market.
The regulator said the conspiracy relied on nine mule accounts that were used to execute coordinated front-running trades. Investigators found that multiple accounts were operated through common devices, internet connections and IP addresses, exposing what SEBI described as a centrally controlled trading network.
ALSO READ: SBI Cards Q1 Results: Profit Up 20% As Bad Loans Improve, Spending Surges
The regulator's investigation relied heavily on digital evidence, including WhatsApp messages, call detail records (CDRs), device forensics and trading patterns. SEBI said the evidence established a clear flow of confidential information from Joshi to other participants in the scheme and demonstrated coordinated trading activity designed to exploit non-public information.
The order also highlighted the use of communication platforms such as FaceTime and BOTIM, along with remote trading terminals, to facilitate the sharing of confidential information and execution of trades.
SEBI rejected claims that certain statements and confessions had been obtained under coercion, noting that the admissions were corroborated by independent digital evidence and forensic findings.
The regulator further observed that several account holders knowingly facilitated the fraud by sharing their trading credentials and allowing their accounts to be used as conduits for the front-running operation.
As part of the enforcement action, SEBI directed the disgorgement of unlawful gains amounting to Rs 30.56 crore along with interest at 12% per annum.
Viresh Joshi and Prijesh Kurani have been barred from accessing the securities market for seven years. SEBI also imposed a monetary penalty of Rs 3 crore on Joshi and Rs 1 crore on Kurani.
In addition, key facilitators involved in the scheme have been prohibited from participating in the securities market for five years, while mule account holders have been barred for three years.
SEBI said the front-running operation undermined market integrity and investor confidence by exploiting confidential institutional trading information for personal gain. The regulator added that the case underscores the importance of robust internal controls and surveillance mechanisms within financial institutions to prevent the misuse of non-public information.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.