Who Is Viresh Joshi? Former Axis Mutual Fund Manager Arrested In Rs 200 Crore Front-Running Scam

Viresh Joshi, a former key trader at Axis Mutual Fund, was arrested by the Enforcement Directorate (ED) for his role in a 'front-running' scam, police said on Sunday. Authorities have seized assets worth Rs 17.4 crore from him, and they believe that the total illegal profits from this scam could exceed Rs 200 crore. Here is all about the mastermind behind the Rs 200 crore scam.

Who Is Viresh Joshi?
Viresh Joshi was a mutual fund manager and chief dealer who orchestrated a Rs 200 crore scam through front-running in the stock market. He reportedly used trading terminals in Dubai to conduct front-running trades through "mule accounts" received from various brokers.

Expert stockbrokers, with their extensive knowledge of the market, often employ various deceptive tactics like 'insider trading', 'front-running', and 'pump and dump' schemes. These have frequently surfaced in the stock market, severely impacting investors. In this instance, however, these illicit tricks were employed by a mutual fund manager and chief dealer who carried out a Rs 200 crore mutual fund scam through front-running in the stock market. Axis Mutual Fund's former fund manager and chief dealer, Viresh Joshi, has been arrested under the Prevention of Money Laundering Act (PMLA).

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The Enforcement Directorate, a government financial probing agency, seized assets worth Rs 17.4 crores, including shares, mutual funds, and bank balances, from Joshi.

What Did Viresh Joshi Do
Joshi has been accused of 'front-running' between 2018 and 2021, using his advance knowledge of large trades by Axis Mutual Fund to place his own orders and illicitly gain profits.

Viresh Joshi was the then-fund manager of Axis Mutual Funds. An investigation was initiated against him based on an FIR registered by Mumbai Police in December 2024. Joshi was accused of taking advantage of confidential information about trades conducted by Axis Mutual Fund and trading in stocks in advance, leading to huge illegal gains. Joshi was associated with an asset management company worth Rs 200,000 crore. The ED reported that the fraud committed by Joshi had cost Axis Bank and others huge sums.

The agency stated that Joshi had used a trading terminal in Dubai to conduct many front-running trades through "mule accounts" received by many brokers.

The ED also stated that, apart from Joshi, many others have misused advance inputs on Axis Mutual Fund trades and indulged in front-running to make illegal trade profits.

The ED estimated that the proceeds of crime (PoC) earned by the identified traders and brokers so far is more than Rs 200 crore, and the figure is expected to rise as the investigation is ongoing.

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What Is 'Front-Running'
Front-running, or insider trading, is a criminal offense in the stock market in which a person gains money illicitly by taking advantage of information received by them in advance. In other words, they get a whiff of certain stocks and invest in them heavily before other investors do. They eventually make a profit by selling those stocks, causing heavy losses to other investors.

What Modus Operandi Did Viresh Joshi Use
Police reports claim that Viresh Joshi used a trading terminal setup in Dubai. He allegedly concealed his accounts to hide his activities. He used a network of "mule trading" (dummy accounts) to execute his trades ahead of client transactions.

Initial findings suggest that proceeds could exceed Rs 200 crores through shell entities and bank accounts linked to Joshi and his family. As of now, the ED has frozen assets worth Rs 17.4 crore, including shares, mutual funds, and bank balances, believed to be proceeds of crime.

Action Against Viresh Joshi
Axis Mutual Fund terminated Joshi's employment in May 2022, following an internal review that revealed unusual trading patterns. The ED's investigation is ongoing, and further developments will occur as the probe progresses. Besides the ED, the Income Tax Department and SEBI (Securities and Exchange Board of India) are also investigating Joshi's activities.