Bank Of America Suspends Two Indian Bankers Amid Insider Trading Probe: Report

The inquiry was launched earlier this year by Bank of America following a whistleblower complaint

BofA's two bankers, including a senior member of the bank's Indian investment banking operation, were put on leave on Tuesday.

Source : FreePik

Bank of America (BofA) has placed two investment bankers in India on administrative leave as part of an internal investigation into alleged insider trading activities within its Asian operations, according to a report from the Financial Times. The inquiry was launched earlier this year following a whistleblower complaint.

It aims to determine whether Bank of America employees and bankers within its Asian investment bank improperly disclosed sensitive information regarding upcoming secondary offerings. Such disclosures could have enabled select investors to "front run" stock sales, profiting from access to non-public information. The specific details of the allegations and the identities of those involved have not been revealed, and Bank of America has declined to comment on the ongoing matter.

The two bankers, including a senior member of the bank's Indian investment banking operation, were put on leave on Tuesday. Attempts to reach them for comment were unsuccessful.

Bank of America is conducting the investigation with the assistance of external law firms, focusing on whether bankers in its Asian operations communicated with hedge funds and other parties before major secondary stock offerings on behalf of corporate clients.

The investigation is examining multiple deals but is particularly focused on a $200 million stock sale by the Sun Life insurance subsidiary of Indian conglomerate Aditya Birla, which occurred in March. Investigators are probing whether the Bank of America bankers shared details of this offering and other related non-public information with select investors.

Regulatory requirements dictate that banks must disclose meetings with investors within one day of occurrence. A source familiar with the situation indicated that Bank of America had uncovered evidence suggesting that the Indian bankers arranged meetings with certain investors prior to the offerings without disclosing these meetings as mandated. Additionally, they reportedly failed to comply with a “cooling off” period required by both regulators and the bank itself.