According to SEBI’s findings, former Chief Dealer Viresh Joshi abused his position at Axis Mutual Fund to access non-public information regarding impending large-scale institutional buy and sell orders. Joshi transmitted this sensitive order data through encrypted platforms, including Apple FaceTime and BOTIM, to Dubai-based co-conspirator Prijesh Kurani.
Kurani then executed front-running trades using Open Dealer Integrated Network (ODIN) terminals supplied by broking firms Marfatia Stock Broking and Woodstock Broking. The illicit trades were routed through nine conduit trading accounts belonging to Kurani’s close family members, an offshore entity named MKB Bespoke Audio General, and third-party mule accounts arranged through a network of intermediaries. Key facilitators Sumit Desai, Pranav Vora, and Vaibhav Pandya assisted in procuring trading accounts and enabling remote terminal access.
The SEBI order details an offshore layering mechanism, wherein a Dubai-based company, Vintage Capital Investment LLC (incorporated by Joshi’s father and brother with Kurani’s assistance), was used to receive and layer funds linked to the scheme.
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SEBI confirmed that the ₹30.55 crore impounded during interim proceedings in February 2023 will be formally disgorged and transferred to the Investor Protection and Education Fund (IPEF), along with 12% annual interest calculated from the end of the investigation period until the deposit date.
Viresh Joshi (Chief Dealer): 7-year market debarment and a monetary penalty of ₹3 crore.
Prijesh Kurani (Primary Executioner): 7-year market debarment and a monetary penalty of ₹1 crore.
Sumit Desai & Pranav Vora (Intermediaries): 5-year market debarments with penalties of ₹65 lakh and ₹50 lakh, respectively.
Nishil Marfatia & Suresh Jajoo (Broker Directors): 3-year market debarments and ₹40 lakh penalties each for facilitating terminal access.
Vaibhav Pandya (Facilitator): 3-year market debarment and a ₹5 lakh penalty.
Remaining 14 Noticees (Mule Account Owners & Partners): Market debarments ranging from 3 to 7 years and individual penalties of ₹10 lakh each (totalling ₹1.40 crore).
In its order, SEBI firmly rejected arguments by mule account holders claiming passivity or lack of direct knowledge, clarifying that lending trading credentials or accounts for third-party control constitutes a direct violation of Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations. The regulator also refused requests to offset disgorgement amounts against trading losses or operational costs incurred during the scheme. Furthermore, SEBI reaffirmed its extra-territorial jurisdiction over cross-border entities operating from Dubai under the “effects doctrine,” noting that the fraudulent scheme directly harmed domestic mutual fund investors and distorted market price discovery.
All penalised entities have been directed to pay their monetary penalties within 45 days.
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(Edited by : Ajay Vaishnav)
