MUMBAI (Reuters) – India enforcement agency seized 1.29 million rupees ($15,360) during searches at Axis Mutual Fund’s offices in Mumbai and Kolkata related to an ongoing investigation of front-running, the agency said on Wednesday.
The Enforcement Directorate (ED) started its investigation last year after the country’s market regulator identified 305 million rupees in wrongful gains due to alleged front-running activities.
Front-running is a market malpractice of making personal gains by trading in securities ahead of large client orders.
The regulator had also barred 21 entities, including Viresh Joshi, the then chief dealer of Axis MF, from capital markets.
“Joshi was allegedly sharing market-sensitive information in return for kickbacks from brokers having terminals in Dubai who could execute trades on his instructions,” the ED said in a press statement announcing the searches.
Gains from these trades were received by Joshi in cash and routed through Kolkata-based entities, the ED added.
Joshi had been fired from Axis Mutual Fund. He could not be immediately be reached for comment. An email sent to the fund house was not immediately answered. ($1 = 83.9700 Indian rupees)
(Reporting by Jayshree P Upadhyay; Editing by Savio D’Souza)
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