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Informist, Friday, Jul. 24, 2026

 

Prateem Rohanekar

 

MUMBAI – The Securities and Exchange Board of India Friday banned former Axis Mutual Fund chief dealer Viresh Joshi and 20 others from dealing in securities or being associated with the securities markets for up to seven years and imposed fines aggregating to INR 74 million. The regulator was investigating Joshi and others for front-running, where Joshi used non-published information he obtained as chief dealer at Axis Mutual Fund to help himself and at least eight others to make INR 305.59 million in wrongful gains.

 

The investigation stems from trades of certain entities that generated front-running alerts with SEBI's systems. During the investigation SEBI found that Joshi had shared non-published information about impending orders of Axis Mutual Fund to a co-conspirator and co-noticee, Prijesh Kurani. Others involved in the front-running operation--Sumit Desai, Pranav Vora, and Vaibhav Pandya--had introduced Joshi to Kurani and arranged for mule accounts to conduct the trades that generated the wrongful gains.

 

SEBI found that Joshi and Kurani used a complex setup of information carriers and mule accounts to generate substantial unlawful returns. The duo siphoned off institutional data and used specialised brokerage terminals to compromise market integrity and distort the price discovery mechanism for ordinary investors.

 

SEBI also found that the setup's operations used nine mule accounts to carry out the trades from the non-published information as a deliberate tactic to bypass the automated serveillance systems of the exchanges and the market regulator. It further found that the mule accounts from SEBI-registered brokers Marfatia Stock Broking Pvt. Ltd. and Woodstock Broking Pvt. Ltd. were knowingly lent in exchange of gratification.

 

"Mr. Viresh being the information carrier has not traded in his own account, disgorgement cannot be computed on a trade-by-trade basis against him. But, this cannot be a reason for him to not be held liable," SEBI noted in the order. The regulator noted that unlawful gains generated would be withdrawn in cash and routed through accountants and agents using a Dubai-based company.

 

The regulator further observed that front-running operations that use demand and supply created by large buy and sell order of institutional investors such as mutual funds create economic consequences for unitholders of the mutual funds in the form of reduced portfolio value or diminished returns. The regulator also observed that experienced market professionals who lend their trading accounts to third parties to carry out front-running trades facilitate misuse of their accounts in a manner that compromises market integrity.

 

SEBI noted that certain individuals involved in front-running were repeated offenders and had been the subject of proceedings by it in other matters. The regulator said repeated violations by such individuals had been considered as an aggravating factor while deciding the debarment period.  End

 

Edited by Rajeev Pai

 

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