SEBI Alleges BofA Workers Shared Private Information
In the notice sent to the bank months ago, SEBI is also alleging that the bank provided incomplete information in the investigation when the regulator originally inquired.
India’s market regulator is alleging that Bank of America Corp. employees shared non-public information with other colleagues inside the firm about a block trade of shares in 2024, according to a person familiar with the matter.
The bank received a “show-cause notice” from the Securities and Exchange Board of India which outlines their accusations and asks for the bank’s reply, said the person, who asked not to be identified citing private information. Bank of America is preparing a response to the allegations, the person said.
A representative for the bank declined to comment. Representatives for SEBI didn’t immediately respond to a request for comment outside of business hours.
The regulator is alleging that bank employees were sharing information between workers who were not directly involved in the deal. In the notice sent to the bank months ago, SEBI is also alleging that the bank provided incomplete information in the investigation when the regulator originally inquired, the person said.
The Wall Street Journal earlier reported on the regulator’s findings.
Bank of America has been dealing with allegations surrounding a 15 billion rupee ($170 million) share sale in 2024 by Aditya Birla Sun Life Asset Management Co., where the Wall Street firm worked as the broker. SEBI has previously sought details from the banks about the matter, Bloomberg has reported.
Block trades are large, privately negotiated deals for securities, executed off public exchanges and usually between big investment firms. Brokers help facilitate these trades to avoid moving prices in the public markets on a high-volume order. It’s then later reported for transparency.
Sharing nonpublic information ahead of an announcement can allow some investors to profit from the expected price move. The practice is illegal in India, the US and other markets.
Amid Bank of America’s internal investigation on allegations of wrongdoing involving stock offerings, three dealmakers in India left the company in 2024, Bloomberg has reported.
The bank has been seeking to rebuild its investment-banking team in the country since then. Last year, the company received approval to appoint Vikram Sahu as its chief executive officer for India.
