Sebi seeks 16 entities in Axis mutual fund case

The Securities and Exchange Board of India (Sebi) has carried out search and seizure operations on 16 suspicious entities at more than 30 locations in Maharashtra and Gujarat over the past few weeks as part of its ongoing investigation into the matter. said to be leading at Axis Mutual Fund, said a senior official at the capital market regulator.

Mint first reported on May 18 that some fund managers of Axis Mutual Fund used to share trading information with outside brokers, which was then used by seven entities in Gujarat who traded these tips in large numbers. . Some of these entities were shell companies.

Axis Mutual Fund fired two fund managers, Viresh Joshi and Deepak Agarwal, on alleged misconduct charges, without disclosing details. Joshi sent a legal notice to the fund house alleging wrongful termination.

Over the past few months, Sebi has received alerts from its internal monitoring alert system and information from the National Stock Exchange regarding suspected pre-execution of Axis Mutual Fund trades. The fund managers’ modus operandi was pieced together using Sebi’s own alerts, NSE data and a preliminary report submitted by the fund house.

Front running is the act of trading securities before the fund house. As mutual funds make large transactions, their actions tend to impact stock prices, and a person can profit or avoid losses by having prior knowledge of such transactions.

“Based on said alerts and surveillance information, Sebi has initiated an investigation into the alleged trafficking of Axis MF by certain entities,” the official quoted above said on condition of anonymity.

“During the search and seizure, officers searched the official and residential premises of 16 entities covering Axis MF officers, stock brokers, stock broker authorized persons and traders. Sebi seized various files, documents, and digital evidence from cell phones, laptops, desktops, tablets, hard drives, and more. found in the custody of these entities,” the official added.

Joshi was a manager, equity broker and fund manager for six funds at Axis Mutual Fund. Deepak Agarwal was an equity research analyst and fund manager for three mutual fund plans.

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Dolores W. Simon