4 min readMumbaiJul 25, 2026 08:35 AM IST
The Securities and Exchange Board of India (SEBI) has barred former Axis Mutual Fund chief dealer Viresh Joshi from accessing the securities market for seven years stating that he orchestrated a front-running scheme using confidential information about the fund house’s impending trades. The regulator also barred 20 others from the market for 3-7 years in its final order in the front running case.
SEBI also slapped Rs 3 crore penalty on Viresh Joshi and a total of Rs 7.4 crore from 21 people involved in the case.
Front-running in a mutual fund is an illegal trading practice in which an insider — such as a fund manager, dealer or broker — uses material non-public information about a large pending trade on behalf of the mutual fund or a client to execute personal trades ahead of that order, intending to profit from the price movement that occurs when the fund’s trade is executed.
During the investigation after the fraud was detected in 2022, it was found that Joshi shared non-public information about impending orders of a big client to an external co-conspirator, Prijesh Kurani.
Kurani on the instructions of Joshi would place orders in certain conduit/ mule accounts of 15 others, the SEBI order said. Sumit Desai, Pranav Vora and Vaibhav Pandya aided Joshi in executing the alleged front running scheme by arranging the conduit/ mule accounts and introducing Joshi to Kurani, the regulator said.
In the interim order dated February 28, 2023, SEBI directed impounding of Rs 30.55 crore as the prima facie unlawful gains arising from the alleged front running activity, jointly and severally against the 21 Noticees.
“The present matter discloses an unusually elaborate fraudulent scheme. The facts indicate that Viresh (Joshi) engaged Sumit and Pranav to procure proprietary accounts for use at his instance, coordinated with Prijesh (Kurani), used coded identities and mule accounts, drafted an email for Bhavin denying the misuse of his demat account, routed unlawful gains in cash through accountants and agents, and created a company in Dubai for routing such gains abroad,” SEBI said.
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The gravity of the matter is further aggravated by the fact that Joshi, the co-conspirator has been repeatedly found by SEBI to be in violation in other matters involving PFUTP Regulations, and that the total unlawful gain identified in this order is significantly higher than in past precedents, it said.
The order said the mule account owners cannot be treated as passive or innocent participants when they have knowingly permitted their demat account to be used by third parties for execution of impugned trades.
“Their accounts provided the instrument through which the impugned trades were concealed,” it said.
“This enabled the real operators to mask beneficial control and avoid detection. Where the record shows conscious account lending, receipt of consideration, third party funding/operation, or no credible explanation for such use, the account holder becomes a facilitator of the fraudulent scheme,” SEBI said.
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Further, the Big Client as at March 31, 2022 had approximately 1.28 crores investor accounts. The illegal gains involved along with the large investor base, reflects the scale of the market abuse.
“Viresh (Joshi) was not merely a passive conduit of information, the material on record shows that he conceived and orchestrated the scheme, identified and coordinated with the executioner (Prijesh), directed the trading activity, and facilitated routing of wrongful gains through a Dubai based company that appears to have been incorporated to further the scheme and obscure the trail of illicit proceeds,” SEBI said.