India’s market regulator Sebi has accused a Bank of America (BofA) entity of breaching insider trading regulations and internal information-barrier norms in connection with a $180 million share sale of Aditya Birla Sun Life Asset Management (ABSL AMC) in 2024.
According to a regulatory notice, Sebi’s investigation examined the role of BofA’s domestic securities unit in handling the block deal executed in March 2024. The regulator found that the bank’s deal team was in possession of unpublished price-sensitive information while engaging, either directly or indirectly, with potential investors ahead of the public disclosure.
Sebi noted that the conduct pointed to a breakdown of so-called “Chinese walls” between the bank’s deal advisory, broking, and research functions, raising concerns over internal controls and the protection of confidential information.
The regulator cited interactions involving three investors HDFC Life Insurance, Norway’s central bank Norges Bank, and Indian investment firm Enam Holdings as part of its findings.
Under India’s insider trading framework, once an investment bank is appointed to manage a transaction, it is prohibited from sharing or seeking feedback on price-sensitive information from teams or external parties without a clearly defined legitimate purpose.
Sebi said that in this instance, BofA’s research, broking, and Asia-Pacific teams reached out to investors after the bank was formally mandated on February 28, 2024, but before the share sale was publicly announced on March 18, 2024. The regulator has termed this sequence of actions a violation of insider trading norms.
The matter is currently under regulatory review, and the notice seeks explanations from the concerned parties.
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