Key Takeaways
- BlackRock agreed to a $2.5 million fine for failing to properly disclose a fund's investments.
- The company's Multi-Sector Income Trust (BIT) inaccurately referred to Aviron Group as a 'diversified financial services company'.
- Aviron's owner was charged with defrauding $13.8M from the now-defunct firm.
BlackRock, Inc. (BLK), has been charged by the Securities and Exchange Commission (SEC) for failing to properly disclose investments at a firm it was advising.
The world’s largest investment firm by assets under management (AUM) agreed to pay a $2.5 million fine for its failure to properly disclose investments in the entertainment industry. The SEC's complaint said from 2015 to 2019, BlackRock Multi-Sector Income Trust (BIT) made investments, via a lending facility, in Aviron Group, LLC.
Aviron developed print and advertising plans for films, but the SEC found BIT’s annual and semi-annual reports "inaccurately described Aviron as a 'Diversified Financial Services' company." The regulator also found BlackRock's statements noted Aviron paying a higher interest rate than it actually was.
Andrew Dean, Co-Chief of the SEC's Enforcement Division’s Asset Management Unit, said both retail and institutional investors need "accurate disclosures" of fund portfolios, and "BlackRock failed to do so with the Aviron investment.”
In a separate litigation last year, the SEC charged William Sadleir, founder of the now defunct Aviron group, of "defrauding" $13.8 million from the publicly traded firm. BlackRock had invested approximately $75 million in the fund, according to the press statement.
FAQs
Key Takeaways
How much did the SEC fine BlackRock? ›
BlackRock Advisors agreed to pay $2.5 million as part of a settlement with the Securities and Exchange Commission (SEC) addressing allegations the firm inaccurately described investments a fund it advised made in a now-defunct film production company.
What has BlackRock been accused of? ›
BlackRock headquarters in New York. Tennessee sued BlackRock Inc. for allegedly breaching consumer protection laws by making “misleading” statements about its ESG investment strategy.
What is the legal action against BlackRock? ›
The order comes three months after Tennessee filed a lawsuit against BlackRock, claiming the firm breached consumer protection laws by making “misleading” statements about its ESG strategy. Chief Executive Officer Larry Fink has said he no longer uses the ESG label because it's become too politicized.
Is BlackRock moving away from ESG? ›
Amidst this global trend, BlackRock, the world's largest asset manager, has taken a bold step by transitioning its investment strategy from ESG investing to a broader approach called transition investing. This move has significant implications not only for BlackRock but for the entire financial industry.
How much has BlackRock lost? ›
Davos 2023: BlackRock U.S. lost $4 billion in ESG backlash, CEO says.
Who owns most of BlackRock? ›
BlackRock's largest institutional shareholders are Vanguard Group, BlackRock Fund Advisors, State Street Global Advisors, Temasek Holdings, and Bank of America. The company's largest individual shareholders include original BlackRock owners and founders Larry Fink and Susan L. Wagner, Robert S.
Why are people pulling out of BlackRock? ›
BlackRock, as the largest global investment management company, and a leading voice in the investment community on climate and energy transition-related investment themes, has found itself at the center of a vocal anti-ESG movement by Republican politicians in the U.S., who have accused the firm of following a social ...
Who are the real owners of BlackRock? ›
BlackRock is not owned by a single individual or company. Instead, its shares are owned by a large number of individual and institutional investors. The biggest institutional shareholders such as The Vanguard Group and State Street are merely custodians of the stock for their clients.
What if BlackRock goes bust? ›
In the extremely unlikely scenario that Penfold AND BlackRock and/or HSBC were to go out of business, your money is protected by FSCS.
Conservatives' war on BlackRock. A conservative group known for targeting "woke capitalism" has launched a multimillion-dollar campaign attacking BlackRock and its CEO Larry Fink for "weaponizing" retirement funds with its push for more ESG investments, which promote environmental, social and governance responsibility.
How much is Larry Fink really worth? ›
Is BlackRock an ethical company? ›
We lead with ethics and integrity
As a Participant of the United Nations Global Compact, BlackRock considers methods to implement practices that align its corporate operations with the universal principles on human rights, labor, environment and anti-corruption.
Does BlackRock invest in Israel? ›
BlackRock is a global investment manager, operating in Israel since 2016. We are committed to helping more and more people plan for their financial future.
How many states have pulled out of BlackRock? ›
Prior to the action announced Tuesday, Arizona, Arkansas, Florida, Louisiana, Missouri, South Carolina, Utah and West Virginia announced similar divestments. The largest previous divestment was Florida's, worth $2 billion, announced by Florida CFO Jimmy Patronis in December 2022.
Who is behind BlackRock investments? ›
Larry Fink is the founder, CEO and chairman of powerhouse investment management firm BlackRock, one of the world's largest asset managers. He and seven partners founded BlackRock in 1988. Originally it was part of The Blackstone Group. BlackRock was spun off from Blackstone in 1994 and went public in 1999.
How much does the SEC make in fines? ›
Enforcement's FY 2023 "performance review" continues the previous year's trend of record-breaking achievements. Following last year's historic $6.4 billion in remedies ordered, Enforcement secured roughly $4.95 billion in regulatory penalties and fines in FY 2023 – the second highest in the agency's history.
Where does SEC fine money go? ›
The SEC is responsible for establishing and enforcing various rules and regulations. Securities violations can include insider trading, accounting fraud, and securities fraud. Penalties and disgorgements from SEC actions go to the U.S. Treasury, to the SEC, and to victims' & whistleblowers' funds.
How much money did BlackRock handle? ›
April 12 (Reuters) - Assets at BlackRock (BLK. N) , opens new tab hit a record $10.5 trillion in the first quarter and the firm posted a 36% jump in profit as rising global equity markets boosted its investment advisory and administration fees, the world's largest asset manager said on Friday.
