Bank of America Corp. traders did not properly restrict confidential information about a 2017 block sale in Esprit Holdings Ltd. shares before disclosing details to Segantii Capital Management, Hong Kong prosecutors alleged on Monday.

The case centers on "wall-crossing" procedures—the standard practice of limiting material non-public information to only certain parties before a broader announcement. Prosecutors said Bank of America traders failed to wall-cross Segantii before sharing information about the potential block trade, potentially violating securities regulations.

Block sales involve large institutional investors disposing of significant share positions, often to minimize market impact. Esprit Holdings, a Hong Kong-listed fashion retailer, was the target of the transaction. Segantii Capital Management, a Hong Kong-based hedge fund, received deal information without proper safeguards, according to the prosecution.

The case underscores the critical importance of information barriers in investment banking and trading operations, particularly in Asian markets where regulatory enforcement around insider trading has grown increasingly aggressive.