Massive Crackdown Over Rs 200-Crore Front-Running Scam Linked To Axis Mutual Fund

The Enforcement Directorate (ED) conducted extensive searches across multiple cities over the past two days as part of a widening probe into an alleged front-running scam involving Axis Mutual Fund. The searches were carried out in Delhi, Mumbai, Gurugram, Ludhiana, Ahmedabad, Bhavnagar, Bhuj, and Kolkata under the Prevention of Money Laundering Act (PMLA), 2002.

The investigation stems from a December 2024 FIR filed by Mumbai Police against Viresh Gangaram Joshi, the then fund manager and chief dealer at Axis Mutual Fund. Described as the key conspirator in the case, he was arrested on August 2 and has been sent to ED custody till August 8.

According to the ED, Mr Joshi misused confidential trade information from Axis Mutual Fund between 2018 and 2021 to execute trades in advance through proxy accounts, generating massive illicit profits. These acts allegedly cheated retail and institutional investors of the fund, which manages assets worth over Rs 2 lakh crore.

ED officials revealed that Mr Joshi operated from a terminal in Dubai, using mule trading accounts sourced from various brokers. Further investigations have uncovered a network of traders and brokers who also exploited pre-trade data, generating over Rs 200 crore in illegal profits.

The illicit gains were routed through several shell companies and bank accounts linked to the accused and their family members. During the raids, the ED froze assets including shares, mutual fund holdings, and bank balances worth Rs 17.4 crore.

Front-running is a serious securities fraud in which insiders trade using non-public client information for personal gain, undermining market fairness and investor confidence.