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SEBI alleges BofA breached its insider-trading rules in a 2024 stock deal
The matter pertains to the conduct of BofA's domestic securities unit in managing a March 2024 stock sale of Aditya Birla Sun Life Asset Management Co. Ltd.
The Securities and Exchange Board of India has accused a Bank of America unit of violating its insider trading rules and breaking internal “Chinese walls” in connection with a 2024 share sale, according to a notice.
The notice followed a SEBI investigation into the conduct of BofA's domestic securities unit in managing a March 2024 stock sale of Aditya Birla Sun Life Asset Management Co. Ltd. The investigation found the bank's deal team, while holding unpublished price-sensitive information on the share sale, contacted potential investors “directly/indirectly”, it said.
At the deal team's request, the bank's broking arm, research team, and Asia-Pacific syndicate team reached out to investors and shared valuation reports and other confidential details, according to the notice dated 30 October 2025 reviewed by Reuters.
“The conduct highlights failure of (the bank's) deal team to maintain Chinese walls with broking/research arms, impacting safekeeping of confidential information and internal controls,” SEBI said in the notice. BofA suppressed material facts and made false statements during the probe, it said.
Bank of America and SEBI did not respond to emailed queries from Reuters. The Wall Street Journal first reported the SEBI notice to the bank.
SEBI's notice cites the bank's interactions with three investors:
- HDFC Life, India’s second-largest private insurer
- Norges Bank, or the central bank of Norway
- Enam Holdings, an Indian investment firm
BofA has filed an application with SEBI to settle the charges without admitting guilt, a person with direct knowledge of the matter said. The application is under review, said this person on the condition of anonymity due to the sensitive nature of the issue.
The case first came to light in 2024 via a whistleblower complaint, which led to an internal bank probe and the exit of senior officials.
Do SEBI's insider trading rules apply to foreign firms?
India's insider trading rules, like those in many other countries, prohibit an investment bank from sharing price-sensitive information without a legitimate purpose with employees outside of the deal team once it has been appointed to manage a transaction.
SEBI said in this case, BofA's research, broking and Asia-Pacific teams sought investor feedback after the bank was appointed to manage the transaction on 28 February 2024 and before formal announcement of the share sale on 18 March 2024, which it said was a breach of the rules.
The notice cites one such example where the deal team asked the broking arm to provide a valuation report for ABSL AMC and its sponsor, Aditya Birla Group, to Enam Holdings, a potential investor in the share sale.
In another instance, the deal team requested the APAC syndicate team in Hong Kong—not a part of the deal team—to seek feedback from Norges Bank on its interest in the offering.
“As such, information related to dealings with ABSL AMC was not handled by (the bank) on a ‘need-to-know’ basis,” SEBI said, adding that broking, research, and syndicate teams acted on behalf of the deal team. The notice didn't provide evidence of an exchange of specific price-sensitive information in any of the interactions.
HDFC Life, Norges Bank and Enam Holdings did not respond to queries.
“This case looks less like classic insider trading and more like an internal-controls failure, which can attract serious regulatory action,” said Sumit Agrawal, Senior Partner at Regstreet Law.
