To date, the illicit funds traced to various traders and brokers exceed Rs 200 crore, and the total amount may be significantly higher. The ED also claims that fraud proceeds were routed through multiple shell entities and bank accounts controlled by the accused and their family members.
New Delhi: The Enforcement Directorate (ED) on Sunday announced the arrest of Viresh Joshi, a former chief trader and fund manager at Axis Mutual Fund, under the Prevention of Money Laundering Act (PMLA). Joshi is accused of defrauding investors of approximately Rs 200 crore through “front-running” in trading activities.
A special PMLA court remanded Joshi, taken into custody on Saturday, to ED custody until August 8. The agency’s action follows searches conducted on August 1 across multiple locations, including Delhi, Mumbai, Gurugram, Ludhiana, Ahmedabad, Bhavnagar, Bhuj, and Kolkata.
ED officials explained that front-running is an illegal practice in which brokers or traders use advance knowledge of pending client orders to execute personal trades, undermining market integrity and disadvantaging other investors.
The ED investigation, proceeding under the civil provisions of the Foreign Exchange Management Act, builds on Income Tax Department searches carried out in 2022. According to the ED, the probe targets illicit profits generated by front-running in securities traded by Axis Mutual Fund between 2018 and 2021.
This money laundering case was registered based on an FIR lodged by Mumbai Police in December 2024. The FIR alleges that Joshi exploited confidential information about upcoming trades executed on behalf of Axis Mutual Fund, which manages over ₹2 lakh crore in assets, to pre-emptively trade stocks and secure substantial illicit gains.
The ED further alleges that Joshi used a terminal in Dubai and mule trading accounts from various brokers to place these front-running orders. Investigators have identified numerous other traders and brokers who similarly misused advance trade information to generate illegal profits, now deemed proceeds of crime.
To date, the illicit funds traced to various traders and brokers exceed Rs 200 crore, and the total amount may be significantly higher. The ED also claims that fraud proceeds were routed through multiple shell entities and bank accounts controlled by the accused and their family members.
During its searches, the ED froze shares, mutual funds, and bank balances totaling Rs 17.4 crore.
