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Three Bank of America dealmakers in India have left amid an ongoing investigation into allegations of wrongdoing in the US financial group’s Asian unit, according to three sources familiar with the matter.
The bankers resigned on Thursday and their departures were tied to the investigation, according to two sources familiar with the matter.
The internal investigation, which was launched earlier this year following a whistleblower complaint, is probing whether BofA and bankers in its Asian operations had tipped off certain investors of upcoming secondary offerings, allowing those investors to “front run” the stock sales and profit from non-public information.
At issue were meetings the bankers held with corporate executives and hedge funds prior to stock offerings, according to two sources familiar with the matter. The investigation is looking at a number of deals but is focused on a $200mn stock sale in March for the Sun Life insurance subsidiary of Indian conglomerate Aditya Birla.
BofA’s internal investigation is ongoing, and it is not clear what information the bankers shared with the hedge funds or other investors. A spokesperson for BofA declined to comment. The bankers could not be reached for comment.
Bankers in India, and elsewhere, are required to disclose such meetings within one day to stock exchanges and investors. Banks are also required to adhere to a “cooling off” period after private meetings before launching stock offerings.
A person familiar with the investigation said BofA had determined that in some instances the bankers had not properly disclosed the meetings, and that the timing of some subsequent offerings might have been inappropriate.
Regulators in India were looking into the matter, and contacted BofA in September, according to people familiar with the matter.
