- SEBI alleges Bank of America leaked material nonpublic details of a roughly $180 million 2024 Aditya Birla Sun Life AMC block trade by sharing them beyond the deal team and sounding out investors before announcement.
- The notice says internal units (broking, research, syndicate) and outside investors including HDFC Life, Enam Holdings, and Norges Bank received deal terms and valuation information.
- SEBI also claims BofA initially misled investigators before an internal review surfaced further evidence, citing weak “Chinese walls” and compliance controls.
- BofA has received a show-cause notice and is reportedly pursuing a settlement without admitting wrongdoing, with potential penalties and reputational fallout.
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The recent SEBI findings against Bank of America reveal serious lapses in internal processes, risk control, and compliance culture. SEBI’s November 2025 show-cause notice alleges that in a March 2024 block trade worth approximately $180 million in Aditya Birla Sun Life AMC stock, BofA’s deal team shared price-sensitive unpublished information with internal broker-research units and syndicate teams not directly responsible for execution. [4,5] These units in turn communicated with external investors, including HDFC Life, Enam Holdings, and Norges Bank, seeking feedback and sharing valuation documents, prior to the public announcement of the sale. [2,4,5]
Critical also is the allegation that BofA initially misled SEBI, asserting that its processes were compliant and that no non-deal team communication had occurred; only after SEBI’s requests did an internal review unearth evidence of broader involvement. [1,2,6] SEBI further faults the bank for deficient “Chinese walls” and inadequate compliance controls to prevent the escalation of confidential information leakage. [4,5] The bank is reportedly negotiating a settlement in the millions, though with no admission of guilt. [1,2]
Strategically, this case underscores heightened regulatory scrutiny in India, especially for global investment banks. It reinforces the importance of data governance, internal separation of functions, and swift, transparent responses to investigations. The reputational impact among institutional investors and potential exposure under other jurisdictions (e.g., the U.S., if cross-border rules are implicated) may also be material. For Bank of America, this could mean stricter oversight, possible penalties, and internal reorganizations to shore up compliance deficiencies.
Open questions include: What financial penalty will SEBI impose, and what form will the settlement take? Who in senior management (especially in deal origination or investment banking India) will be held accountable? Did any external investors profit from this premature leak, possibly triggering damage claims? Are there cross-jurisdictional implications, including in the U.S., for similar conduct? And finally, what systemic reforms—both at BofA and for SEBI-regulated entities—will arise in reaction to this case?
Supporting Notes
- Block trade was worth approximately US$180 million. [1,2]
- The trade concerned shares in Aditya Birla Sun Life AMC in 2024, formally managed by BofA’s domestic securities unit. [1,2,4]
- SEBI alleges the deal team shared price-sensitive unpublished information with internal groups not part of the deal team (broking, research, Asia-Pacific syndicate), and those units engaged investors ahead of the public announcement. [2,4,5]
- Investors named include HDFC Life, Enam Holdings, and Norges Bank. [2,4]
- BofA initially denied improper communication, claiming standard practice, but later after an internal probe corrected its disclosures to SEBI when more records surfaced. [1,3]
- Several senior bankers, including the former head of investment banking in India, left the bank in connection with this issue. [1,3]
- SEBI issued a show-cause notice in November 2025; bank is preparing a settlement without admitting wrongdoing. [1,2]
- The notice found that internal controls (e.g., “Chinese walls”) were insufficient to prevent leaks of material non-public information. [4,5]