India’s markets regulator, the Securities and Exchange Board of India (SEBI), has accused a Bank of America (BofA) business of violating insider trading rules and breaching internal “Chinese walls” during a 2024 share sale. The allegations stem from SEBI’s investigation into BofA’s Indian securities unit’s management of a March 2024 Aditya Birla Sun Life Asset Management (ABSL AMC) stock sale. Aditya Birla Sun Life Asset Management is an Indian asset management company. Bank of America is a global financial institution providing a range of banking, investment, asset management and other financial and risk management products and services.
According to the SEBI notice, BofA’s deal team, while possessing unpublished price-sensitive information, allegedly contacted potential investors directly and indirectly. The broking arm, research team, and Asia-Pacific syndicate team then reportedly shared valuation reports and confidential details at the deal team’s request. SEBI contends this conduct demonstrates a failure to maintain adequate “Chinese walls,” compromising confidential information and internal controls.
SEBI further alleges BofA suppressed crucial information and made false statements during the investigation, which originated from a whistleblower complaint in 2024. The notice cites interactions with HDFC Life, Norges Bank, and Enam Holdings. Indian insider trading regulations prohibit sharing price-sensitive information outside the deal team without a legitimate reason after being appointed to manage a transaction. BofA has filed an application with SEBI to settle the charges without admitting guilt, and is also responding to the SEBI notice.
The SEBI notice detailed instances where BofA’s teams sought investor feedback after being appointed to manage the deal but before the formal announcement of the share sale, a breach of regulations, according to SEBI. The notice did not provide evidence of an exchange of specific price-sensitive information in any of the interactions.
