The Bombay High Court has dismissed the FIR against former Axis Mutual Fund chief dealer Viresh Joshi in a front-running case, emphasising the regulator’s role, as SEBI imposes a seven-year market ban and investigates further allegations.
The Bombay High Court has quashed the first information report against Viresh Joshi, the former chief dealer at Axis Mutual Fund, in a front-running case, while saying the Securities and Exchange Board of India should move quickly if the allegations justify action. The court held that cases tied to offences under the SEBI Act must be brought through a complaint from the regulator itself, not through ordinary police prosecution.
Justice R.R. Bhonsale said the case registered at Sion police station and later transferred to the Economic Offences Wing was, in substance, a front-running matter covered by the special securities law. Front-running refers to trading on advance knowledge of a fund’s planned orders, allowing traders to profit before those orders are executed.
According to the allegations, Joshi had access to confidential information on large Axis Mutual Fund trades and passed it to others, who then bought or sold ahead of the fund’s orders. Investigators said the scheme generated losses for investors, while the Enforcement Directorate has also alleged that the proceeds were moved through a network of entities and accounts. The court said there may still be scope for separate offences under general criminal law, and it left open Axis Mutual Fund’s own complaint.
The ruling comes weeks after SEBI issued a final order barring Joshi from the securities market for seven years and imposing a ₹3 crore penalty, with the regulator saying the impounded funds of about ₹30.56 crore would be treated as disgorgement. Business Standard and The Economic Times reported that SEBI also acted against other people linked to the case, while later reporting said the Enforcement Directorate had arrested Joshi in a money-laundering probe tied to the same alleged trading scheme.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
