- SEBI found Bank of America improperly shared confidential, price-sensitive information ahead of a 2024 US$180m block trade in Aditya Birla Sun Life AMC shares.
- The regulator alleges weak “Chinese walls,” with MNPI reaching broking, research, and syndicate teams and being used in outreach to investors before the trade was announced.
- SEBI says BofA misled investigators by initially denying the communications and later revising its account after an internal review.
- BofA is pursuing a multi-million-dollar settlement without admitting wrongdoing, and the case has prompted senior exits and heightened compliance risk for banks in India.
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The findings by SEBI raise serious concerns about information barrier failures within BofA’s India operation, particularly in managing MNPI in block trades. In many markets, block trades require strict controls over who within a firm has access to deal terms, and informal communications (e.g., WhatsApp) can breach both legal obligations and internal policies.
Key issues include:
1. Internal Control & Compliance Breakdown: SEBI’s notice claims that non-deal team units such as research, syndicate, and broking were given advance access to deal information. This directly contravenes protocols designed to separate deal functions from market-facing or client-facing arms.
2. Misleading Regulatory Process: Initially, BofA reportedly denied that communications outside the deal team occurred. Only after internal probes did it admit that these contacts did take place. False or incomplete disclosures during regulatory investigations often exacerbate exposure and penalties.
3. Financial & Reputational Exposure: Though SEBI has not yet imposed a fine, the show-cause notice signals intention for further action. A settlement could cost millions, and senior personnel turnover already indicates internal acknowledgment of severity. Legal exposure may extend beyond India if other jurisdictions’ laws are implicated.
4. Strategic Implications for BofA and Global Banks: For multinational investment banks in India, this case will likely pressure tighter regulatory oversight, enhanced compliance functions, and formalization of information barriers. Clients’ trust could erode, affecting deal-flow. Also, SEBI’s enforcement here may set precedent for how block trades and MNPI are treated across markets.
5. Open Questions: The precise amounts of any settlement are not yet public. It is unclear how widespread the practice is within BofA, or whether external parties profited from advance information. Also unknown: what remediation steps are being taken, and whether legal liability (civil or criminal) beyond regulatory penalty is possible.
Supporting Notes
- SEBI accused BofA in November 2025 of improperly sharing price-sensitive/confidential information about a 2024 sale in Aditya Birla Sun Life AMC, worth approximately USD $180 million.
- Deal team shared information with broking arm, research unit, Asia-Pacific syndicate team, and employees not directly involved in the transaction.
- Internal communications reportedly took place via WhatsApp, and investors such as HDFC Life, Norges Bank, and Enam Holdings were contacted ahead of public announcement.
- BofA allegedly misled SEBI, first denying unauthorized communication, then corrected its statements after its internal review.
- Multiple senior bankers have left the bank, including the former head of investment banking for India.
- BofA intends to seek a settlement in the “millions of dollars” without admitting or denying wrongdoing.