New Delhi, Aug 3 As part of an ongoing probe into illegal trade activities related to Axis Mutual Fund, the ED arrested scam mastermind Viresh Joshi and seized proceeds of crime (POC) in the form of shares, mutual funds and bank balance worth Rs17.4 crore during multi-city searches, an official said on Sunday.
Joshi, the then Chief Dealer of Axis Mutual Fund, was arrested on Saturday under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
He was produced before the Competent Court, which granted his custody to the ED till August 8, said the official in a statement.
The Enforcement Directorate (ED), Headquarters Office, New Delhi, conducted the search operations on Friday and Saturday at multiple locations in Delhi, Mumbai, Gurugram, Ludhiana, Ahmedabad, Bhavnagar, Bhuj and Kolkata.
The search operations were part of an ongoing investigation into the illegal profits made by certain entities/persons by indulging in front-running trade activities in scrips traded by Axis Mutual Fund during 2018 to 2021.
The ED initiated an investigation based on an FIR registered by the Mumbai Police in December 2024, which alleged that Viresh Joshi, the then Fund Manager of Axis Mutual Fund, exploited confidential information on trades to be executed on behalf of Axis Mutual Fund to pre-emptively trade stocks, generating substantial illicit gains.
The accused has, thereby, cheated the investors of Axis Mutual Fund, which holds assets under management of more than Rs 2 lakh crore, the ED said.
The accused had utilised a terminal in Dubai to punch the front-running trade orders through mule trading accounts obtained from various brokers.
In addition to the accused Viresh Joshi, investigation has revealed that many other traders/brokers had also misused the advance inputs on Axis Mutual Fund Trades and indulged in front running to generate illicit trade profits, which is nothing but POC.
The POC generated by various traders/brokers, as identified till date by the ED, is more than Rs 200 crore, which could be much higher.
The proceeds of the fraud were funnelled through multiple shell entities and bank accounts beneficially owned by the accused persons/entities and their family members, which is under investigation by the ED.
Front-running refers to an unethical and illegal practice in the securities market where brokers or traders execute orders for their own benefit using advanced knowledge of pending client orders. This malpractice compromises market integrity and disadvantages other investors.
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