Axis AMC Settles with SEBI Over Front-Running Allegations: A Case of Mismanagement

Axis Asset Management Company, its Trustee, and former executives have settled with Sebi over alleged failures in monitoring dealer activities, leading to front-running of trades. The settlement involved a payment of Rs 6.29 crore, resolving accusations of compromised trade integrity and unauthorized dealing room access.

Axis Asset Management Company (AMC) has reached a settlement with the Securities and Exchange Board of India (SEBI) concerning accusations of regulatory lapses that permitted improper trading practices within the organization. The allegations pointed to a lack of proper oversight over dealer activities, particularly concerning the front-running of fund trades.

The settlement involved a collective payment of Rs 6.29 crore by AMC, its former CEO Chandresh Kumar Nigam, former compliance officer Darshan Kapadia, ex-equity head Jinesh Gopani, and former dealer Pawan Jhangiani. The entities resolved the case with SEBI without admitting or denying the claims, effectively closing the chapter on this regulatory dispute.

Investigations highlighted significant vulnerabilities in AMC's trading protocols, such as unauthorized access to its dealing room and negligence in revoking access for certain staff. These oversights resulted in compromised trade integrity and breaches in operational procedures, as confirmed by a forensic examination from Alvarez & Marshal India and other auditing firms.

(With inputs from agencies.)