Sebi Alleges Insider Trading Violation by BofA in 2024 ABSL AMC Share Sale

Bank of America (BofA) unit in India allegedly violated insider trading rules in a 2024 share sale linked to Aditya Birla Sun Life Asset Management (ABSL AMC). The allegations were levelled by India’s market regulator, the Securities and Exchange Board of India (Sebi), in a notice issued last year.

In a notice sent to the lender in October 2025, Sebi said the bank’s deal team, despite being in possession of unpublished price-sensitive information related to the share sale, approached potential investors through direct and indirect channels, Reuters reported.

At the deal team’s direction, the bank’s broking unit, research division and Asia-Pacific syndicate team contacted investors and circulated valuation assessments and other non-public information, the regulator alleged.

The transaction at the centre of the Sebi notice was a block sale of shares in Aditya Birla Sun Life Asset Management in 2024. The sale, valued at about $177–180 million, was managed by the investment bank’s local securities unit.

Sebi’s notice refers to the bank’s dealings with three investors, HDFC Life, Norway’s central bank Norges Bank, and Enam Holdings. Under Indian insider trading regulations, once an investment bank is appointed to manage a transaction, it is barred from sharing unpublished price-sensitive information with employees outside the deal team unless there is a legitimate purpose.

Sebi said that after the bank was appointed on February 28, 2024, and before the share sale was formally announced on March 18, its research, broking and Asia-Pacific teams approached investors to seek feedback, which the regulator said violated these rules.

The notice cited an instance in which the deal team asked the bank’s broking arm to share a valuation report on ABSL AMC and its sponsor, the Aditya Birla Group, with Enam Holdings, a potential investor.

In another case, the deal team requested the Asia-Pacific syndicate team in Hong Kong, which was not part of the deal team, to gauge Norges Bank’s interest in the offering.

“As such, information related to dealings with ABSL AMC was not handled on a ‘need-to-know’ basis,” Sebi said, adding that the broking, research and syndicate teams acted on behalf of the deal team. The notice, however, said it did not establish evidence of any specific exchange of unpublished price-sensitive information in these interactions.

“The conduct highlights the failure of the bank’s deal team to maintain Chinese walls with broking and research arms, impacting the safekeeping of confidential information and internal controls,” Sebi said, according to the news agency.

How the allegations came to light

The matter surfaced in 2024 following a whistleblower complaint, which triggered an internal investigation at the bank and led to the exit of senior executives.

According to the Sebi notice, the bank initially told the regulator that it had not held any meetings or discussions with investors related to the share sale and said an internal legal review had found no breach of Indian regulations. The bank also maintained that any investor feedback was general in nature and had been obtained before it was appointed to manage the transaction.

Sebi said the bank acknowledged interacting with potential investors on the share sale only after it was presented with responses received from HDFC Life and Enam. The notice added that the bank informed Sebi that three officials were asked to step down or leave in November 2024 for violating internal procedures, including failing to obtain clearances before meeting investors and hindering internal inquiries, and not for breaching securities laws.

A source told Reuters that the bank has applied to settle the case with Sebi without admitting wrongdoing. The settlement application is currently under review.