ED cracks down on ₹200-crore front-running scam, arrests ex-Axis Mutual Fund manager

The Enforcement Directorate (ED) has launched a massive crackdown on an alleged ₹200-crore front-running scam linked to Axis Mutual Fund, culminating in the arrest of Viresh Gangaram Joshi, the fund's former manager and chief dealer. Joshi, described as the key conspirator, was arrested on August 2 and has been remanded to ED custody until August 8. The ED's action follows an extensive two-day search operation across eight cities, including Delhi, Mumbai, and Kolkata, under the Prevention of Money Laundering Act (PMLA).

The investigation stems from a December 2024 FIR filed by Mumbai Police. According to the ED, Joshi misused confidential trade information from Axis Mutual Fund between 2018 and 2021, executing advanced trades through "proxy accounts" to generate massive illegal profits. The agency's probe has uncovered that Joshi operated from a terminal in Dubai, using "mule trading accounts" sourced from a network of brokers and traders. This malpractice allegedly defrauded retail and institutional investors of the fund, which holds assets under management worth over ₹2 lakh crore.

During the multi-city raids, the ED has frozen assets, including shares, mutual fund holdings, and bank balances, worth ₹17.4 crore. The agency claims that the illicit gains, which total over ₹200 crore, were funneled through a web of shell companies and bank accounts linked to the accused and their family members. Front-running is a serious securities fraud where insiders trade using non-public client information for personal gain, thereby undermining market integrity and investor confidence. The investigation is ongoing, with officials expecting to uncover more details about the network.