- Indias SEBI says Bank of America leaked price-sensitive, non-public details of a roughly $180 million 2024 Aditya Birla Sun Life AMC block trade.
- SEBI alleges the information spread beyond the deal team and was shared with prospective investors including HDFC Life, Jane Street and Norges Bank via channels such as WhatsApp.
- The regulator also says BofA initially misled investigators before internal findings contradicted its statements.
- BofA may seek a multimillion-dollar settlement without admitting wrongdoing as SEBI faults weak information barriers and compliance controls.
Read More
The SEBI findings against Bank of America (BofA) stem from a 2024 block trade of Indian asset-manager Aditya Birla Sun Life AMC shares valued at roughly USD 180 million (or ~$177-180 million in alternate reporting) where confidential, price-sensitive information was shared internally with employees not directly involved in the transaction—and thereafter, that information was relayed to external institutional investors via informal channels. This constitutes a breach of confidentiality and insider trading norms under Indian securities law.
The sequence appears to have unfolded as follows: a whistleblower allegation in 2024 sparked a SEBI investigation; initially, BofA denied any wrongdoing; subsequently, an internal probe revealed external communications and unauthorized access, prompting a correction of its earlier statements to SEBI. The block trade, being potentially market-moving, triggered strict disclosure and information barrier rules, which SEBI says were violated.
The key violations alleged include failure to maintain information barriers (Chinese walls), sharing of unpublished price-sensitive information (UPSI) with non-deal-team staff, and contacting potential investors ahead of public announcement—raising the risk of front-running. SEBI also highlights misrepresentation to investigators; BofA reportedly provided false statements before providing more accurate internal records.
From a governance perspective, these findings carry material strategic implications: BofA may face substantial monetary penalties, reputational damage in India (a major growth market), heightened regulatory scrutiny worldwide, and possible erosion of client trust. Internally, effecting more robust compliance frameworks—e.g. stricter controls on communications, clearer staff separation, auditing access to price-sensitive information—will be imperative. Externally, clients may scrutinize BofA’s ability in terms of confidentiality, and counterparties in India could push for stricter contract terms or oversight.
Open questions include: what specific monetary exposure BofA faces under SEBI’s enforcement regime; what senior executives are implicated; whether there were profitable trades by the external investors referenced; whether similar leaks have occurred in other block trades; how BofA’s global compliance policies compare; and what changes SEBI will demand to its internal policy and oversight. The outcome of BofA’s settlement filing—especially whether it admits or denies wrongdoing—will be closely watched.
Supporting Notes
- The Securities and Exchange Board of India found BofA improperly shared confidential, price-sensitive information about a ~$180 million block trade of shares in Aditya Birla Sun Life AMC in 2024.
- The bank’s deal team shared unpublished price-sensitive data with employees not involved directly in the deal.
- Communications went beyond internal staff: potential investors including HDFC Life, Jane Street, and Norges Bank were contacted via informal channels such as WhatsApp ahead of the block trade.
- SEBI alleged that BofA initially misled investigators, providing false assertions before internal review revealed evidence to the contrary.
- SEBI found that internal controls and compliance guardrails—such as Chinese walls—were inadequately designed or enforced.
- BofA is preparing a response and expects a settlement likely in the millions of dollars; several senior bankers involved in India have since exited or been asked to leave.