India’s securities regulator, the Securities and Exchange Board of India, has alleged that a domestic unit of Bank of America breached insider trading regulations and failed to maintain mandatory internal information barriers during a major equity transaction in 2024, according to a regulatory notice reviewed by open sources.
The allegations arise from SEBI’s investigation into Bank of America’s role in managing a March 2024 share sale of Aditya Birla Sun Life Asset Management, a transaction valued at approximately 177 million dollars. The regulator claims that once the bank was appointed to handle the sale, its deal team improperly engaged with potential investors while in possession of unpublished price-sensitive information.
SEBI’s notice asserts that the bank’s internal Chinese walls were compromised, allowing the deal team to coordinate with the broking, research, and Asia Pacific syndicate divisions. These teams allegedly contacted investors, circulated valuation reports, and sought feedback on the proposed transaction prior to its public announcement on 18 March 2024. Such conduct, the regulator said, undermined the principle that confidential deal information must be shared strictly on a need-to-know basis.
The notice specifically refers to interactions involving HDFC Life Insurance, Norges Bank of Norway and Enam Holdings. In one cited instance, the broking arm reportedly shared valuation material relating to Aditya Birla Sun Life AMC and its sponsor group with Enam Holdings. In another, the Asia Pacific syndicate team based in Hong Kong was asked to sound out Norges Bank, despite not being part of the designated deal team.
While SEBI acknowledged that it has not identified evidence of a direct exchange of specific price sensitive information, it concluded that the overall handling of confidential information reflected serious lapses in internal controls. The regulator also accused the bank of providing incomplete or inaccurate responses during the investigation and of suppressing material facts when initially questioned about investor communications.
The matter reportedly came to light following a whistleblower complaint in 2024, which triggered both a regulatory probe and an internal review at the bank. According to SEBI, three senior officials exited the firm in November 2024 for violating internal protocols related to investor interactions.
As per reports in the open domain, the Bank of America has sought to resolve the proceedings through a settlement application without admission of guilt, which remains under consideration by SEBI. Neither the bank nor the regulator has issued a public response to the allegations.
Legal experts note that the case underscores heightened regulatory scrutiny of investment banks operating in India’s capital markets, particularly in relation to information governance and compliance with insider trading norms.