Market regulator SEBI has started cracking down on stock brokers who were allegedly linked with the front running case of Axis Mutual Fund and conducted raids on 16 brokers at 30 locations in Gujarat and Maharashtra.

Most of the offices raided were from smaller cities and were zeroed in after analysing the data provided by NSE, an industry source said.

Sebi has been analysing the data of Axis MF with that of its brokers to establish a trend and arrive at a quantum of profit made, he added.

Sacking of two employees by Axis Mutual Fund after the internal and external audit is an indication that all is not well in the fund house but finally the blame will land at the doors of brokers as they are the soft target, said a senior executive of a broking firm.

Though it was claimed that the whole issue came to light after the Axis MF's fund manager was seen roaming around in a Lamborghini, sources said the market regulator was warning the fund house for its 'abnormal performance' in most of the schemes even when its competitors were struggling to beat their benchmark.

SEBI should act tough to break the dubious nexus between brokers and mutual funds before investors’ confidence is shaken.

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