BofA settles allegation of insider trading rule violation with Sebi

The Indian investment banking and securities arm of Bank of America agreed to settle allegations of insider trading and merchant banking rule violations with the country’s markets regulator by paying 5.9 million rupees ($61,903), the Securities and Exchange Board of ‌India said ⁠on ⁠Monday.

In its settlement order, the SEBI stated that a show-cause notice sent to BofA Securities India alleged the firm’s failure to maintain the structured digital database required by insider trading regulations. BofA declined to comment on the settlement order and the allegations.

The SEBI said BofA ⁠Securities India ‌agreed to settle the proceedings without ​admitting or ​denying the alleged violations.

In January, Reuters, citing ⁠a regulatory notice, reported that the SEBI had ​accused BofA Securities India of breaching ​insider trading rules and internal “Chinese wall” norms in connection with a 2024 share sale.

The notice followed a SEBI investigation into BofA Securities India’s role in managing a March 2024 share sale in Aditya Birla Sun ‌Life Asset Management.

According to the notice, which was reviewed by Reuters but not made ​public, the ​SEBI found that ⁠BofA’s deal team, while in possession of unpublished price-sensitive information related to the share sale, had contacted potential investors “directly/indirectly”.
The ​regulator had also alleged that BofA suppressed material facts and made false statements during the investigation, which was triggered by a whistleblower complaint in 2024.