Bombay HC quashes FIR against former Axis dealer in front-running case

The Bombay High Court has quashed an FIR against former Axis Mutual Fund chief dealer Viresh Joshi in an alleged front-running case, ruling that prosecution under the SEBI Act can only be initiated on a complaint by SEBI. Justice Ranjitsinha Bhosale, on August 13, held that the special law under SEBI would prevail over general criminal law, and that the FIR registered at Sion police station and later transferred to the Economic Offences Wing could not proceed without SEBI's complaint.

The complainant had alleged that Joshi shared confidential information about large orders with co-accused who traded ahead and profited, causing losses to 66 lakh investors. Times of India reported the complainant claimed a loss of over Rs 2.52 lakh crore, while the Enforcement Directorate pegged the fraud at Rs 93 crore. The court noted the seriousness of the allegations and urged SEBI to take prompt, swift, and effective steps to protect investors and market integrity, directing the regulator to consider action within 12 weeks.