India's capital markets regulator, the Securities and Exchange Board of India (Sebi), has formally issued a notice to Bank of America's Indian operations. The action relates to an alleged breach of rules during a major share sale deal for Aditya Birla Sunlife Asset Management Company (AMC) in early 2024.
The Core Allegations: Sharing Privileged Information
The Sebi notice centers on a $180-million block deal in the shares of Aditya Birla Sunlife AMC that was executed between February and March of 2024. According to regulatory findings, Bank of America's investment banking team, which was working on this transaction, shared privileged and confidential information about the deal with other divisions within the bank.
This internal sharing of sensitive data, which included valuation reports and other deal specifics, is a direct violation of Sebi's regulations designed to prevent the misuse of confidential information. The sharing reportedly occurred with potential institutional investors as well.
Timeline of the Deal and Investigation
Sebi's notice outlines a critical timeline. While the AMC officially appointed one of Bank of America's arms to execute the block deal on February 28, 2024, the public announcement was made much later on March 18, 2025. In the intervening period, the bank's deal team contacted at least three potential institutional investors, sharing the confidential information.
Reports indicate that during the preliminary phase of Sebi's investigation, the bank's team attempted to conceal details about the block deal and provided false statements to the regulator. Initially, Bank of America denied any wrongdoing but has since moved to seek a settlement with Sebi.
Regulatory and Corporate Silence
Following its standard policy, Sebi has declined to comment on the ongoing investigation and adjudication process. When approached for a statement regarding the Sebi notice, Bank of America also did not offer any comments.
The case highlights the stringent framework Sebi enforces to maintain market integrity. The sharing of unpublished price-sensitive information (UPSI) between different departments of a financial institution, especially those with trading operations, is a serious compliance failure.
The outcome of this settlement process or any subsequent adjudication will be closely watched by the investment banking community in India, serving as a precedent for handling confidential deal information. It underscores the critical need for robust information barriers, commonly known as "Chinese walls," within financial institutions to prevent such regulatory breaches.
