SEBI bars 21 entities in Axis front-running case

“an amount of 30 crore as prima facie illegal profit earned from the activities going on in front have been jointly and severally forfeited, the order said. It said that the wrongful gain is to be deposited in the escrow account of SEBI.

The regulator also said that banks are directed that no debits shall be made from the bank accounts of the entities involved in the matter except for the purposes of transfer of funds to the escrow account without the permission of SEBI.

Former fund manager Viresh Joshi and 20 entities have been barred from entering capital markets, according to a 100-page order by the markets regulator.

Essentially, the case pertains to a series of allegations against two executives of Axis Mutual Fund, including absconding, receiving kickbacks from brokers and placing trade orders at inflated prices – in complete disregard of the interests of investors Happened.

Front-running involves buying stock by a mutual fund before an expected large transaction that is likely to increase the share price. When mutual funds place a large order, some fund managers buy the same number of shares in their personal accounts before executing the mutual fund’s order. Also, when these fund houses buy shares in large quantities, the share prices go up.

In August last year, the Income Tax Department had probed Joshi’s various middlemen and several brokers in the LinkedIn premises for alleged tax evasion.

The regulator has also directed 21 entities not to dispose of or alienate assets.