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Axis Securities: Axis Asset Management Company has appointed B Gopakumar as the new CEO of Axis Mutual Fund. After the resignation of Chandresh Nigam, Gopkumar has been made the CEO of Axis Mutual Fund. Prior to this, B Gopakumar was posted as the Managing Director and CEO of Axis Securities.
Last year, two fund managers of Axis Mutual Fund were accused of front running scandal. When the fund house suspended two of its fund managers, one of them was the main dealer Viresh Joshi. There was also an income tax raid on Viresh Joshi’s house. Axis Mutual Fund suspended two of its fund managers – Viresh Joshi and Deepak Agarwal. Also, the fund house had changed the fund managers of 7 schemes. After the removal of both the fund managers, irregularities were also investigated in the funds under the supervision of both the fund managers. Recently, the stock market regulator SEBI had barred 21 entities from trading on the stock market, including Viresh Joshi, former fund manager of Axis Mutual Fund.
In both the cases of front running and insider training, the motive of the criminals is to make money in the stock market by trading in the shares of the company. However, front-running is slightly different from insider training. In this, a dealer or money manager working with a financial institution or mutual funds or a major stockbroker tries to make profit by taking advantage of the information about the buy orders placed on behalf of his institution during the day. Insider training happens when an employee working in a company comes to know some such information, which can affect the shares of the firm and by taking advantage of it, he tries to earn profits by trading in the stock market.
Mutual funds usually buy or sell in bulk. The dealer is fully aware of when this buying or selling is going to happen. Mutual fund dealers take advantage of this information. The shares that the mutual funds are about to buy are bought by the dealers just a few minutes in advance. Later, by buying large amounts of mutual funds, the price of that share goes up in a few minutes and they take advantage of it. In the same way, he earns profit by selling shares of mutual funds a few minutes before selling them.
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