Ex-Axis Mutual Fund manager Viresh Joshi arrested in Rs 200 crore front-running scam

The scam allegedly occurred between 2018 and 2021, during Joshi’s tenure as a senior fund manager.

The Enforcement Directorate (ED) on Sunday said it has arrested Viresh Joshi, former chief trader and fund manager of Axis Mutual Fund, in connection with a Rs 200 crore front-running scam.

Joshi was taken into custody on Saturday (August 3) and has been remanded to ED custody till August 8 by a special court under the Prevention of Money Laundering Act (PMLA).

What is front-running and why is it illegal

Front-running refers to an unethical and illegal practice in which brokers or traders use confidential knowledge of large upcoming trades to place their own orders ahead of clients to earn illicit profits.

In this case, Joshi allegedly used insider information about trades by Axis Mutual Fund to benefit himself and other traders, cheating investors and distorting market fairness, the ED said.

Multiple cities raided, Rs 17.4 crore in assets frozen

The ED conducted nationwide raids across Delhi, Mumbai, Gurugram, Ludhiana, Ahmedabad, Bhavnagar, Bhuj, and Kolkata starting August 1, uncovering a complex network of brokers, mule accounts, and shell companies.

During the search operation, the agency froze shares, mutual fund units, and bank balances worth Rs 17.4 crore, the PTI report added.

Proceeds of crime allegedly routed via shell firms

The ED claims, as per PTI, that Joshi and his associates routed illicit gains, already pegged at over Rs 200 crore and potentially much higher, through multiple shell entities, family-owned bank accounts, and trading terminals abroad, including in Dubai.

“The accused used mule accounts obtained from brokers to punch trades ahead of Axis Mutual Fund transactions,” the ED said as cited by PTI.

The scam allegedly occurred between 2018 and 2021, during Joshi’s tenure as a senior fund manager.

Case traced back to Mumbai police FIR, IT probe in 2022

The current money laundering case is based on a First Information Report (FIR) filed by Mumbai Police in December 2024.

Separately, the Income Tax Department had also conducted searches linked to Joshi’s trades in 2022, and the ED had been investigating the case under civil provisions of FEMA until now.

Axis Mutual Fund AUM tops Rs 2 lakh crore

At the time of the alleged scam, Axis Mutual Fund managed assets worth over Rs 2 lakh crore. The fund house had removed Joshi from his position in 2022 following an internal review of unusual trading patterns.

ED sources tell PTI that several traders and brokers benefited from the leaked trade information, pointing to a wider network of collusion within the securities market.