Synopsis: SEBI says Bank of America violated market rules during Aditya Birla Sun Life AMC’s 2024 share sale worth $180 million. SEBI highlighted some lapses involving confidential information, which is prohibited from being shared with others, while
The shares of Aditya Birla SUN Life AMC came under pressure in today’s trade after the market regulator, SEBI, finded some key lapses involved in the 2024 shares sales of the company, in which Bank of America was managing the sale. In this article, we will dive more into the details of it.
With a market capitalisation of Rs 23,885 crore, the shares of Aditya Birla Sun Life AMC Ltd reached a day’s low of Rs 823.55 per share, down nearly 4 percent from its previous day’s closing price of Rs 853.85 per share. In the last one year, the stock has delivered a muted return of 4 percent, underperforming NIFTY 50’s return of 10 percent.
What happened?
India’s market regulator, SEBI, claims Bank of America breached the line during a $180 million share sale (over Rs 1,600 crore) for Aditya Birla Sun Life Asset Management in 2024. SEBI sent a show-cause notice to the bank on October 30, 2025, accusing it of violating insider trading rules and disregarding “Chinese Walls, the internal controls meant to keep sensitive deal information from reaching people outside the main team.
So, what actually happened?
Mostly, it comes down to timing. Bank of America was hired to manage the share sale on February 28, but the deal wasn’t announced until March 18. That left 18 days where the deal team had access to information that wasn’t public. During this period, the team involved the bank’s broking arm, research department, and Hong Kong-based syndicate team to reach out to investors and send out valuation reports, information that should have stayed confidential.
Three major investors received these details: HDFC Life (a large Indian insurer), Norges Bank (Norway’s central bank), and Enam Holdings (an Indian investment firm). For instance, the broking arm sent a valuation report for ABSL AMC and its sponsor, Aditya Birla Group, to Enam Holdings. In another case, the syndicate team contacted Norges Bank to see if they were interested in participating.
Indian insider trading laws are strict. Once a bank is brought in for a deal, sharing price-sensitive information outside the deal team is strictly prohibited. It’s supposed to be on a “need-to-know” basis, and Bank of America broke that rule by involving teams who shouldn’t have been included.
When SEBI first started asking questions, Bank of America claimed everything was proper, no improper meetings, no violations, and that any investor conversations happened before they were officially engaged. But when SEBI produced evidence from HDFC Life and Enam Holdings, the narrative shifted. The bank then admitted the conversations occurred and provided records showing non-deal team members had been in contact with investors.
That didn’t look good. SEBI concluded that Bank of America had not only breached its internal controls but also “suppressed material facts and made false statements” during the investigation. The fallout was swift. Three senior investment bankers in India left Bank of America in November 2024, right after the internal probe. The bank then tried to settle with SEBI, without admitting guilt, and the settlement is expected to cost a lot. SEBI is still evaluating the application.
Is this classic insider trading? Not exactly. Legal experts say the main issue is the failure to maintain proper information barriers, a major concern for regulators. Even if there’s no evidence that crucial market-moving information was shared, simply failing to keep those barriers intact is enough to cause trouble.
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