Bombay High Court Quashes FIR Against Former Axis Mutual Fund Chief Dealer In Front-Running Case

The Bombay High Court quashed an FIR against former Axis Mutual Fund chief dealer Viresh Joshi in an alleged front-running case on August 13, 2026. Justice RR Bhonsale held that prosecutions under the Securities and Exchange Board of India (SEBI) Act can be initiated only on a complaint by SEBI, not by police. The court noted that the special provisions of SEBI Act would prevail over general criminal law.

The FIR alleged Joshi misused confidential information about large fund orders to tip off co-accused persons, who traded ahead and profited from the fund's transactions, causing investor losses. The Enforcement Directorate had argued the EOW was competent to investigate related offences such as cheating and criminal breach of trust.

However, the court found the FIR's substance concerned front-running, governed exclusively by SEBI Act provisions. It urged SEBI to take "prompt, swift and effective steps" if the allegations warranted action, given their potential impact on market integrity and investor protection.