SEBI Identifies Confidential Data Leak by Bank of America Prior to 2024 Block Deal: Report

India’s markets regulator, SEBI, has reportedly found that Bank of America (BofA) shared confidential information ahead of a major block trade involving Indian fund house Aditya Birla Sun Life AMC in 2024, as per Wall Street Journal report. 

This $180 million deal, equivalent to approximately ₹1,500 crore, has now come under regulatory scrutiny following internal findings and a whistleblower complaint. 

SEBI Issues Notice Over ₹1,500 Crore Block Deal Incident 

According to reports, SEBI issued a show-cause notice to BofA in November, alleging that price-sensitive information on the upcoming block trade had been shared with individuals not directly involved in the transaction.  

The deal pertained to the offloading of shares in Aditya Birla Sun Life AMC worth around $180 million or approximately ₹1,500 crore. 

SEBI stated that BofA’s internal deal team failed to safeguard confidential data, allowing external communication before the deal’s official announcement.  

This could have enabled certain investors to benefit from non-public information, in violation of Indian securities law. 

False Statements and Lack of Safeguards Highlighted 

Further findings indicated that BofA initially misled SEBI during its inquiry, claiming full compliance with internal protocols.  

However, an internal review later revealed communications between individuals outside the core deal team and investors. Records proving these interactions were eventually submitted to SEBI. 

In response to the regulator’s allegations, BofA is reportedly preparing a formal reply and may consider settling the matter by paying a penalty in millions of dollars without admitting guilt, as per the report. 

Read More: SEBI Proposes 30-Day Lag for Educational Use of Stock Price Data! 

Whistleblower Triggered SEBI’s Detailed Review in 2024 

The case was initiated following a whistleblower complaint flagged in 2024. At the time, BofA had maintained that no irregularities were found.  

Later developments and a deeper probe led the bank to revise its earlier statements and acknowledge flaws in information-sharing protocols. 

SEBI’s regulations prohibit selectively disclosing non-public information that could affect share prices. Authorities emphasised that proper data security procedures and access control were not adequately followed in this case. 

Conclusion 

The incident underscores the importance of information security in capital markets. BofA is now facing regulatory action over allegedly sharing confidential details ahead of the ₹1,500 crore share sale of Aditya Birla Sun Life AMC and failing to maintain necessary safeguards. 

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