SEBI Cracks Down: Major Front Running Scheme Uncovered at Axis Mutual Fund; Penalties Imposed Against 21 Entities

SEBI Cracks Down: Major Front Running Scheme Uncovered at Axis Mutual Fund; Penalties Imposed Against 21 Entities​

The Securities and Exchange Board of India (SEBI) has delivered a definitive Final Order in the high-profile case concerning front running trades related to the Axis Mutual Fund (Big Client). The order, issued on July 24, 2026, concludes that a sophisticated scheme existed where key personnel within the mutual fund—specifically Mr. Viresh Joshi—systematically leaked Non-Public Information (NPI) to external conspirators.

The investigation concluded with SEBI finding a strong preponderance of probability that this organized fraud led to significant unlawful gains in the market. The order targets 21 entities, including the Kurani Group, the Marfatia Group, and the Jajoo Group, all implicated in facilitating or executing the front running trades between September 2021 and March 2022.

Allegations of Orchestrated Market Abuse at Axis MF​

The SEBI order establishes that Mr. Viresh Joshi, identified as a Chief Dealer at Axis Mutual Fund (Noticee 1), was central to the alleged scheme. He is accused of abusing his position by sharing NPI regarding impending large orders of the Big Client with external conspirators, notably Mr. Prijesh Kurani (Noticee 5).

The fraud was facilitated through an elaborate network structure. Mr. Viresh coordinated closely with Mr. Prijesh in this front running operation. The illicit trades were executed across various designated mule accounts—held by entities like Dharini Kurani and the Marfatia Group, among others. These transactions are characterized as being done either to bypass automated surveillance or to conceal the identity of the real perpetrators.

The findings confirm that the fraudulent activities constituted a deliberate misuse of trust and a direct compromise of market integrity. The scheme involved coded identities and offshore structures, including the incorporation of Vintage Capital Investment LLC in Dubai, which served as an alleged mechanism for routing illegal profits overseas.

Consequences and Remedies Under SEBI Directions​

SEBI has determined the extent of violation based on the trades executed in the mule accounts, totaling INR 30,55,89,668.96 across the relevant entities. The findings state that the scheme was not merely a financial arrangement but a designed act to defraud the market and intended to obscure the origins of illicit proceeds.

Disgorgement Liability:
The culpable parties have been directed to disgorge the unlawful gains generated from the front running activities. The liability for each entity is as follows:

• Marfatia Group (Noticees 11, 12, 15, 16): Total wrongful gain was INR 9,49,61,536.22.
• Jajoo Group (Noticee 17): The singular entity reported a massive wrongful gain of INR 14,07,03,340.80.
• Kurani Group (Noticees 6, 7, 8, 9): These entities collectively accounted for INR 6,99,24,791.94 in wrongful gains.

SEBI has held that since the information carrier (Mr. Viresh Joshi) did not trade in his own account, disgorgement must be jointly and severally imposed on him and other parties involved in the scheme—including Mr. Prijesh Kurani and the arrangers of mule accounts.

Penalties and Market Restrictions Imposed​

The SEBI Quasi-Judicial Authority has levied significant penalties and restrictive orders against all implicated individuals and corporate entities, reflecting the seriousness of the abuse.

Market Access and Debarment:
The Noticees have been placed under severe restrictions from accessing the securities market and are prohibited from dealing in securities directly or indirectly for defined periods. The key restrictions include:

• Mr. Viresh Joshi (Noticee 1): Restricted for a period of 7 years.
• Mr. Prijesh Kurani (Noticee 5): Restricted for a period of 7 years.
• The Kurani Group (Noticees 6, 7, 8, 9): Restricted for 7 years.
• Mr. Sumit Desai (Noticee 2): Restricted for 5 years.
• Mr. Pranav Vora (Noticee 3): Restricted for 5 years.

Monetary Penalties:
In addition to the disgorgement of illegal gains, monetary penalties have been imposed on all involved parties under Section 15HA of the SEBI Act. The fines range from INR 5 lakh to INR 65 lakh across the various entities and individuals. For instance:

• Mr. Viresh Joshi (Noticee 1) is penalized INR 3,00,00,000.
• Prijesh Kurani (Noticee 5) faces a penalty of INR 1,00,00,000.
• Visa Capital Partners (Noticee 17), part of the Jajoo Group, has been penalized INR 10,00,000.

The SEBI Order stresses that these measures are not merely punitive but are necessary remedial actions to preserve market integrity against such elaborate forms of organized crime in the financial domain.