India’s capital markets regulator, the Securities and Exchange Board of India (SEBI), has concluded in a key investigation that global investment bank Bank of America improperly shared material non-public information linked to the sale of a stake in Aditya Birla Sun Life AMC (ABSL AMC). The findings were first reported by the US-based Wall Street Journal, citing regulatory actions and documents related to the case.
According to the report, SEBI issued a show-cause notice to Bank of America in November 2025, alleging violations connected to a large block trade executed in 2024. The regulator has accused the bank of circulating price-sensitive information internally during the sale of ABSL AMC shares. The block deal, valued at around $180 million, is estimated to be worth more than ₹1,500 crore in Indian currency.
SEBI has stated that members of the deal team shared confidential details with employees who were not directly involved in executing the transaction. The regulator believes that such internal dissemination of sensitive information significantly increases the risk of leaks reaching the market before an official announcement. This, in turn, could allow select investors to benefit unfairly from anticipated price movements, undermining the principle of equal access to information in the securities market.
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In addition to the alleged information leak, SEBI has also accused Bank of America of providing inaccurate or misleading responses during the course of the investigation. According to the report, the bank initially told the regulator that its processes, controls and internal safeguards around the block trade were fully compliant with regulatory norms. However, following an internal review, the bank revised its earlier submissions.
The Wall Street Journal reported that the internal review uncovered records showing that individuals outside the core deal team had interacted with investors regarding the ABSL AMC transaction. SEBI has viewed this as evidence that the bank failed to maintain effective information barriers—commonly referred to as “Chinese walls”—to protect sensitive capital markets information from being disclosed beyond those directly involved in the deal.
The report further said that Bank of America is now preparing its formal response to SEBI’s findings. The bank is also expected to explore the possibility of a settlement that could run into several million dollars. Such a settlement, if pursued, would likely be reached without the bank admitting or denying wrongdoing, a common approach in regulatory enforcement matters aimed at resolving disputes without prolonged litigation.
The controversy surrounding the ABSL AMC stake sale first surfaced in 2024, when the Wall Street Journal published a report based on a whistleblower complaint alleging that confidential information related to the transaction had been leaked. At the time, a spokesperson for Bank of America told news agency Reuters that the bank had found no evidence supporting the allegations after conducting an internal assessment.
However, SEBI’s subsequent investigation appears to have led to a different conclusion. According to the regulator, discrepancies were found between the bank’s initial submissions and the documents provided later. SEBI has maintained that the issue goes beyond a single transaction and raises broader concerns about compliance standards, internal controls and market integrity.
Sharing material non-public information ahead of a corporate announcement is prohibited under Indian securities law, as well as in several other major jurisdictions. Regulators view such conduct as a serious offence because it can distort fair price discovery and erode investor confidence by enabling trading based on unequal access to information.
The report also noted that in 2024, Reuters had reported that three Bank of America investment bankers in India exited the firm amid an internal probe linked to the matter. While the bank did not publicly connect those exits to the SEBI investigation, the development added to scrutiny around its handling of the transaction.
Market experts believe the case sends a strong signal to foreign financial institutions operating in India that regulators are closely monitoring high-value capital market transactions. If a settlement is eventually reached, it is likely to be seen as a stern reminder that lapses in handling confidential information and regulatory compliance will attract strict scrutiny in India’s increasingly mature and tightly regulated capital markets.
About the author – Rehan Khan is a law student and legal journalist with a keen interest in cybercrime, digital fraud, and emerging technology laws. He writes on the intersection of law, cybersecurity, and online safety, focusing on developments that impact individuals and institutions in India.
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