Front running involves mutual fund insiders giving buy or sell recommendations to clients, in order to control prices for the benefit of people they are coordinating with. The chief trader of a firm such as Axis Mutual Fund caught front-running shook up the company as well as investor confidence. Less than a year after Viresh Joshi was found guilty by an internal probe into the fiasco at Axis, the CEO of the mutual fund has been replaced.
Taking over in troubled times
B Gopkumar, who was the MD and CEO at Axis Securities, has been appointed as the new chief executive at Axis Mutual Fund, following Chandresh Nigam's ouster. Ashish Gupta has also been roped in from Credit Suisse to take over as the Chief Investment Officer of the firm.
Wider scam revealed
Following Joshi's involvement, him and 19 others had been barred by SEBI over the front-running scam. It was recently unearthed that Joshi had also been passing on information about trades at the mutual fund to brokers and middlemen in Dubai. The case is also under investigation by the Income Tax Department, apart from the Securities and Exchange Board.
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