The regulator alleged that Joshi passed on information of impending large trades by his employer Axis Mutual to his aides who took positions before the fund house executed the transactions.
Sebi said Joshi, who was privy to the trade information of the fund house including size and timing of orders that were not in public domain would pass on the confidential information regarding the impending trade order to his connected individuals.
Prima facie the investigation shows front-running trades were executed from the trading accounts of Marfatia Group, Woodstock Group and Kurani Group, said the regulator.
“The said trades have prima facie followed either a Buy-Buy-Sell pattern or a Sell-Sell-Buy pattern while front running the trades of the Big Client (Axis Mutual),” the order said.
Sebi alleged Joshi “glaringly abused” his employment as a dealer with Axis MF by “taking pecuniary advantages of the non-public information about the impending orders of his employer fund, i.e. Axis MF (Big Client), for his personal gains”.
Sebi’s investigation was done for the period between September 1,2021 to March 31,2022.The regulator said Joshi took advantage of the lack of physical official supervision during the Covid period when several employers had allowed employees to work from home.
“…due to Covid pandemic apart from having an option to work from home, the dealers of Axis MF were also given separate dealing rooms to ensure social distancing,” said Sebi.
Sebi said Joshi had incorporated a company in Dubai for transferring the wrongful gains using clandestine channels in the bank accounts to create false records so as to evade detection.
During the course of its investigation, Sebi found the entities connected to Joshi had traded in different securities ahead of the impending orders placed on behalf of the fund house. Soon after the fund house’s orders were placed, these connected entities squared off their trade positions.
