SEBI Imposes ₹40 Lakh Penalty in Axis Mutual Fund Front-Running Cases

SEBI Penalises Four Entities in Axis Mutual Fund Investigation

The Securities and Exchange Board of India (SEBI) has imposed penalties totalling ₹40 lakh on two stockbroking firms and their directors in connection with the Axis Mutual Fund front-running investigation.

In an adjudication order dated November 3, 2026, the regulator imposed individual penalties of ₹10 lakh on Woodstock Broking Private Limited, its director Suresh Kanmal Jajoo, Marfatia Stock Broking Private Limited and its director Nishil Surendra Marfatia.

The action relates to the provision of unauthorised access to trading infrastructure that was used in connection with suspected front-running transactions.

SEBI examined trading activity between April 1, 2021, and March 31, 2022.

Investigation Examines Access to Trading Terminals

The regulator's investigation originated from surveillance alerts relating to trades executed ahead of transactions by Axis Mutual Fund.

The investigation examined whether certain entities had obtained advance information about the mutual fund's trading activity and used that information to execute transactions.

SEBI identified Prijesh Kurani, who operated from Dubai, as a person who accessed trading infrastructure associated with the two brokerage firms.

The order examined the installation and operation of ODIN trading terminals on computer systems used by Kurani.

Evidence reviewed included electronic communications, technical records and remote-access arrangements involving software such as AnyDesk.

The regulator found that the brokerage firms had facilitated access outside the authorised trading framework.

Penalties Imposed by SEBI

The regulator directed the penalised entities to pay the amounts within 45 days of receiving the order.

Proceedings against six other noticees were disposed of without monetary penalties in this adjudication.

Why Trading-Terminal Controls Matter

Front-running generally involves trading securities with advance knowledge of substantial transactions expected to be placed by another market participant.

Such activity can raise concerns about unfair trading advantages and market integrity.

SEBI's findings in this order focused on the brokerage firms' responsibilities to maintain controls over their trading terminals and prevent unauthorised access.

The order reinforces the requirement for registered market intermediaries to supervise trading infrastructure, dealer authorisations and access arrangements.

The penalties relate to the specific violations established in the adjudication and should not be interpreted as a finding against all persons connected to the wider investigation.