Axis Mutual Fund Front‑Running Scam Shocks Markets: Ex‑Manager Arrested.

Ex-Axis MF Manager Arrested in ₹200 Cr Scam

• Front-Running Scam

• Axis MF’s Dirty Trade Secrets Exposed

• Insider Trading Busted at Axis Mutual Fund

Unmesh Gujarathi
Sprouts News Exclusive
Contact: +91 9322755098

The ED has arrested ex-Axis Mutual Fund manager Viresh Joshi in a ₹200 crore front-running scam. Joshi allegedly misused insider trade data for personal gain, distorting markets. Nationwide raids uncovered a web of shell firms and mule accounts. Sprouts SIT flags deeper governance failures and earlier ignored red flags at Axis MF.

ED Arrests Former Axis MF Fund Manager in Multi-Crore Front-Running Scam

In a major development shaking the Indian mutual fund industry, the Enforcement Directorate (ED) has arrested Viresh Joshi, former chief trader and fund manager of Axis Mutual Fund, in a ₹200 crore front-running scam. Joshi was taken into custody on August 3 and has been remanded to ED custody until August 8 by a special court under the Prevention of Money Laundering Act (PMLA).

According to ED officials, Joshi exploited his senior role at Axis Mutual Fund to engage in illegal front-running activities—placing personal trades ahead of large fund house orders to earn illicit profits. This market manipulation distorted fair trading practices, violating investor trust and regulatory integrity.

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What Is Front-Running? Illegal Profits from Insider Knowledge

Front-running is a banned trading strategy in which brokers or fund insiders use confidential knowledge of large upcoming trades to place personal orders in advance. In Joshi’s case, he allegedly front-ran trades placed by Axis Mutual Fund using insider information, making profits for himself and a ring of other traders.

The ED stated that this misuse of privileged access led to market manipulation and investor deception. The Sprouts News Investigation Team (SIT) has learned that such practices can significantly impact stock prices, damaging the equity market’s fairness and transparency.

National Crackdown Unveils Complex Network of Brokers and Shell Companies

Following Joshi’s arrest, the ED launched extensive raids across multiple cities, including Mumbai, Delhi, Gurugram, Ludhiana, Ahmedabad, Bhavnagar, Bhuj, and Kolkata. These operations uncovered a sophisticated network of brokers, mule accounts, and shell entities used to facilitate and conceal the illegal trades.

As per official sources, the agency has frozen assets worth ₹17.4 crore—including shares, mutual fund units, and bank accounts. The Sprouts SIT has verified that Joshi allegedly routed proceeds of the crime via a web of entities, including accounts held by family members and associates, even reaching trading terminals abroad such as in Dubai.

Shell Firms, Mule Accounts & Overseas Trading Trail Under Scanner

The ED maintains that Joshi and his associates used mule accounts sourced from brokers to punch orders ahead of Axis Mutual Fund’s trades. These transactions took place between 2018 and 2021 when Joshi was serving as a senior fund manager. Funds earned through these illegal trades were routed through shell firms and foreign accounts to evade detection.

Sources told Sprouts News SIT that the complexity of the laundering route indicates possible foreign exchange violations under FEMA as well. Investigations are now expected to widen to include potential overseas collaborators.

Origin of the Case: Mumbai Police FIR and Income Tax Action

This high-profile money laundering probe stems from an FIR filed by Mumbai Police in December 2024, based on earlier suspicions flagged by internal Axis Mutual Fund reviews. In 2022, the Income Tax Department had also conducted separate searches related to unusual trades attributed to Joshi.

The ED was initially investigating the case under FEMA’s civil provisions but upgraded the case to criminal proceedings under the PMLA after unearthing concrete money laundering evidence. These developments mark a crucial shift in regulatory enforcement over market fraud in India.

Axis Mutual Fund’s ₹2 Lakh Crore AUM Under Cloud

At the time of the scam, Axis Mutual Fund managed assets worth over ₹2 lakh crore. Following initial internal investigations in 2022, the fund house terminated Joshi’s services. However, ED sources told Sprouts News Investigation Team that several traders and brokers benefited from leaked trade information, pointing toward systemic loopholes in internal surveillance mechanisms.

The mutual fund industry, which relies heavily on investor trust, faces reputational damage as this case exposes gaps in compliance monitoring. Market regulators SEBI and AMFI are also expected to intensify their oversight in light of this scandal.

Also Read:  ED Investigates Vedanta Over ₹1,030 Cr Brand Fee Scam.

Previous Axis Mutual Fund Controversies Resurface

This is not the first time Axis Mutual Fund has faced controversy. In 2022, a series of media investigations had revealed unusually high churn in select equity schemes, prompting concerns about trade timing and NAV manipulation. Though no direct action followed, investor confidence was shaken.

Moreover, whistleblowers had earlier flagged internal lapses in risk and audit controls, which were reportedly ignored. The recurrence of high-level manipulation, now proven through ED’s arrest of Viresh Joshi, confirms the Sprouts News SIT’s long-standing suspicion that deeper systemic issues plague governance within the Axis Mutual Fund’s trade execution desk.