SEBI : “discovers” BofA’s breach of private information on the 2024 block trade: Report
SEBI: According to a source, the Securities and Exchange Board of India (SEBI), which oversees capital markets, has determined that a Bank of America (BofA) business misled investigators and inappropriately provided substantial non-public information on a $180 million block sale.
According to the Wall Street Journal report, which cited people familiar with the situation, SEBI’s November show-cause notice claims that the bank’s deal team gave price-sensitive information about a 2024 sale of Aditya Birla Sun Life AMC shares to staff members who were not on the execution team and then gave false information to investigators.
The bank was also purportedly criticized by the regulator for not having sufficient security measures in place to stop the disclosure of private capital-markets transactions. According to the statement, Bank of America is getting ready to respond to SEBI’s charges and is anticipated to pursue a multi-million dollar settlement without acknowledging or refuting any wrongdoing.
Since privileged parties might benefit from anticipated price movements, it is unlawful in India and numerous other markets to share non-public information before announcements. According to the report, the bank revised its previous statement to SEBI and provided documents demonstrating correspondence between non-deal team employees and investors.
SEBI and Bank of America did not react to the news right away.
In 2024, the Wall Street Journal published a whistleblower complaint alleging the leak. However, a bank representative later refuted the charges, claiming there was no proof to back them up.
Using the authority granted to it by certain provisions of the FEMA, the Reserve Bank of India fined Bank of America in November 2023.
Bank of America was penalized for failing to follow guidelines on reporting obligations under the FEMA 1999 Liberalized Remittance Scheme.
Rahul Sharma, CEO of Swan LNG and designated person of Swan Corp (previously Swan Energy Limited), was fined Rs 2 lakh by the market regulator in September for insider trading.
According to SEBI’s probe, Sharma made illegal profits of Rs 30.25 lakh by engaging in transactions and contratrades in Swan Corp shares between September 1 and November 30, 2023.