Fraud in Focus: The Axis Mutual Fund Front-running Scandal

The Enforcement Directorate has launched a sweeping investigation into alleged fraudulent activities at Axis Mutual Fund. Multiple city searches were conducted following the filing of a money laundering case that focuses on front-running trades between 2018 and 2021.

Front-running involves exploitation of client order knowledge for personal gain, undermining market fairness. Viresh Joshi, formerly a chief trader at Axis Mutual Fund, is at the center of these serious allegations, which are said to have substantially compromised investor interests.

The ongoing investigation, conducted under the Foreign Exchange Management Act and the Prevention of Money Laundering Act, spans several Indian cities. Authorities suspect illicit profits were funneled through shell companies and accounts linked to Joshi and his associates.

(With inputs from agencies.)