New Delhi: India’s capital markets regulator, the Securities and Exchange Board of India (SEBI), has reportedly found that a Bank of America (BofA) unit shared confidential, price-sensitive information relating to a $180 million block trade and later misled investigators during the probe, according to a report by the Wall Street Journal.

SEBI’s show-cause notice issued in November alleges that the Bank of America deal team disclosed material non-public information (MNPI) linked to the 2024 block sale of Aditya Birla Sun Life AMC shares to employees outside the authorised execution team. The regulator has also alleged that the bank subsequently provided inaccurate statements during the investigation.

The report further states that SEBI faulted the bank for inadequate safeguards to prevent leaks of confidential capital-markets transactions. Bank of America is reportedly preparing a formal response to SEBI’s allegations and may seek a multi-million-dollar settlement, without admitting or denying wrongdoing.

Sharing non-public market information ahead of official announcements is illegal in India and several major global financial markets, as privileged parties may gain from anticipated price movements. According to the report, Bank of America later corrected its earlier response to SEBI and submitted records showing communications between non-deal team staff and investors.

Neither Bank of America nor SEBI has publicly commented on the report so far.

Earlier, a whistle-blower complaint had alleged a confidential leak in 2024, though the bank had initially denied the claims, stating it had found no supporting evidence. Separately, in November 2023, the Reserve Bank of India (RBI) imposed penalties on Bank of America under FEMA regulations for compliance violations related to the Liberalised Remittance Scheme.

SEBI has also been tightening its crackdown on insider trading in India. In September, the regulator imposed a penalty on Rahul Sharma, CEO of Swan LNG, for insider trading in Swan Corp shares, where Sharma made unlawful gains of Rs 30.25 lakh through trades and contra-trades conducted between September and November 2023.

IANS