- SEBI issued a show-cause notice to Bank of America Securities (India) alleging it shared unpublished price-sensitive information ahead of a $180 million Aditya Birla Sun Life AMC block trade in March 2024.
- The regulator says confidential details were circulated beyond the deal team—possibly to select investors—via channels such as WhatsApp, reflecting weak internal “Chinese walls.”
- SEBI also alleges BofA misled investigators with false or incomplete statements before later internal records contradicted its initial account.
- BofA is reportedly pursuing a multimillion-dollar settlement without admitting wrongdoing as senior India investment-banking staff have departed.
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The SEBI findings represent a serious regulatory breach, focused on standard violations in capital markets involving pre-trade confidentiality, selective disclosure, and misleading conduct during the inquiry. By sharing unpublished price-sensitive information ahead of a large block transaction—outside those directly involved in executing the deal—BofA appears to have violated India’s securities laws and merchant banking norms.
One core issue is internal control failure: SEBI specifically flagged insufficient “Chinese walls” between different functions (deal team, broking, research) and lack of guardrails to restrict information flow. Such breakdowns are often central in investigations of front-running or insider trading.
BofA’s initial defense—that practices were compliant—crumbled after its internal investigation revealed contrary evidence. Contrary communications (via WhatsApp), engagement with investors outside formal roadshows, and undisclosed meetings attest to lapses in procedure, or worse.
Consequences are manifold. Financially, SEBI may impose fines or require disgorgement of gains. Reputational consequence is acute: investors, clients, and counterparties may perceive BofA as risky, especially for sensitive transactions in India. Senior leadership changes indicate internal fallout already underway.
Strategically, this case underscores growing cross-jurisdiction regulatory exposure. Global investment banks must align practices across markets with strong disclosure, strict compliance, and traceable communication. Failure in one market can trigger regulatory scrutiny elsewhere, especially given similar allegations in Asia, first raised via whistleblower complaints in 2024 involving India.
Open questions include: What exactly was the timeline—when did BofA first become aware internally of leaks? What level of investor involvement was proven? What is the likely size of penalty, and will BofA agree to admit to some findings or only settle quietly? Also, could this trigger similar investigations in other jurisdictions where BofA operates?
Supporting Notes
- SEBI issued a show-cause notice in November 2025 accusing BofA of improper sharing of material non-public information relating to a $180 million block trade in Aditya Birla Sun Life AMC shares executed in March 2024.
- The leaked info was shared with bank employees not directly involved in the deal and possibly with external investors—via informal channels like WhatsApp.
- BofA misled the regulator initially by stating its processes were above board, but later provided evidence that contradicted that claim via internal records.
- Several senior bankers, including the head of investment banking for BofA India, have departed.
- Regulatory actions also include allegations of violations of insider-trading rules and the merchant banking code of conduct, along with inadequate internal segregation of functions (Chinese walls) between research, broking, and deal teams.
- BofA is preparing a multimillion-dollar settlement without admitting or denying wrongdoing; the settlement submission is under review.