ED raids Axis Mutual Fund in Mumbai and Kolkata for forex violations

The Enforcement Directorate (ED) conducted searches in Mumbai and Kolkata on Monday as part of an investigation into a front-running scheme associated with Axis Mutual Fund. This operation was initiated under the Foreign Exchange Management Act (FEMA) 1999, following allegations of unethical trading practices against Viresh Joshi, a former chief trader at the fund. The ED seized assets worth Rs. 12.96 lakh, including foreign currencies and incriminating documents related to overseas properties and bank accounts. The investigation revealed that Joshi allegedly shared sensitive market information in exchange for kickbacks from brokers in Dubai, who executed trades based on his instructions. He also engaged with individuals in India to rent their trading accounts, facilitating his illicit activities. The ED's findings suggest that Joshi funneled illegal earnings through shell entities, which provided unsecured loans to him and his family. Further scrutiny indicated that the illegal gains from front-running were used to acquire properties in the UK and to form fixed deposits in India. The ED is now focused on tracing the complete flow of funds to understand the full extent of the violations. This case highlights significant concerns regarding market integrity and the potential for widespread financial misconduct within the mutual fund sector. As investigations continue, the ED aims to uncover the broader implications of these actions, which not only affect the individuals involved but also pose risks to investor confidence and the overall stability of the financial market.