2 weeks ago
Bombay HC Quashes Front-Running FIR Against Axis Mutual Fund Dealer
Viresh Joshi used to work at a big company called Axis Mutual Fund that takes care of people's money.
The police thought he shared secret information to help other people make money.
They believed these people bought and sold stocks right before the company, which is called front-running.
So the police made a case against him.
But a very important court in Mumbai, called the Bombay High Court, said the police could not do that.
The court said only SEBI, the special group that watches the stock market, may handle such cases.
That is the rule written in the special law.
The court did not say the man is innocent.
It just said the case must be started the right way.
If SEBI believes something bad happened, it should act quickly, and the company can still make its own complaint.
The Bombay High Court quashed an FIR against former Axis Mutual Fund chief dealer Viresh Joshi in an alleged front-running case.
Justice RR Bhonsale ruled that prosecution for front-running under the SEBI Act can only be initiated on a complaint by SEBI, per Section 26 of the Act.
The FIR, registered at Sion police station and later transferred to the Economic Offences Wing (EOW), alleged Joshi leaked confidential order information to co-accused who traded ahead of the fund.
The Enforcement Directorate argued there was sufficient material to proceed and that the EOW was competent to investigate offences like cheating and criminal breach of trust.
The court urged SEBI to take 'prompt, swift and effective steps' if warranted, and left open other independent offences and Axis Mutual Fund's separate complaint.
- Who
- Justice RR Bhonsale of the Bombay High Court, former Axis Mutual Fund chief dealer Viresh Joshi, and agencies including the EOW and the ED.
- What
- The court quashed an FIR against Viresh Joshi in an alleged front-running case, ruling that prosecution under the SEBI Act requires a complaint by SEBI.
- Where
- Bombay High Court, Mumbai.
- When
- The court order was delivered on August 13; the ruling was reported on August 15, 2026.
- Why
- Because Section 26 of the SEBI Act allows a court to take cognisance of an offence under the Act only on a complaint made by SEBI, and the special law takes precedence over general criminal law.
Prosecution / Agencies
Bombay High Court
Who can prosecute front-running
Prosecution / Agencies
The EOW was competent to investigate offences such as cheating and criminal breach of trust, and there was sufficient material to proceed against Joshi.
Bombay High Court
The FIR was essentially about front-running; under Section 26 of the SEBI Act, only a complaint made by SEBI allows a court to take cognisance, and the special law takes precedence over general criminal law.
How to treat the allegations
Prosecution / Agencies
The ED claimed the proceeds were subsequently routed through different entities and accounts, and the prosecution alleged the activities caused losses to investors.
Bombay High Court
The court acknowledged a 'strong prima facie case' and serious allegations, but held the proper legal route must be followed and urged SEBI to take prompt, swift and effective action.
Key facts
- Court
- Bombay High Court
- Judge
- Justice RR Bhonsale
- Accused
- Viresh Joshi, former chief dealer, Axis Mutual Fund
- Allegation
- Front-running – sharing confidential information about large fund orders with co-accused
- FIR origin
- Sion police station; later transferred to the Economic Offences Wing (EOW)
- Legal basis for quashing
- Section 26 of the SEBI Act – cognisance only on SEBI's complaint
- Order date
- August 13, 2026
- Outcome
- FIR quashed; SEBI urged to act; Axis Mutual Fund's separate complaint left open
Quotes
Justice RR Bhonsale
Judge, Bombay High Court
“"No court can take cognisance of an offence under the Act except on a complaint made by the SEBI Board."”
freepressjournal.in
“"Prompt, swift and effective steps" must be taken by SEBI if the allegations warrant action.”
freepressjournal.in
Sources
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