When you’re the world’s largest asset manager, with close to $10 trillion AUM, you have to expect some highs and lows.
BlackRock has been charged by the SEC for failing to accurately describe investments in the entertainment industry and has agreed to pay $2.5 million to settle the case. The investments comprised a significant portion of a publicly traded fund it advised.
The regulator said that between 2015 and 2019 several investments were made in Aviron Group, a company that created movie advertising, through a lending facility by BlackRock Multi-Sector Income Trust.
The SEC order states that in investor information and official filings BalckRock inaccurately described Aviron as a “Diversified Financial Services” company and that the interest rates that Aviron was said to be paying were higher than the actual rates. These inaccuracies were corrected in information supplied from 2019 onwards.
“Retail and institutional investors rely on accurate disclosures of the companies that make up a closed-end or mutual fund’s portfolio to evaluate a current or prospective investment in the fund,” said Andrew Dean, co-chief of the regulator’s Enforcement Division’s Asset Management Unit. “Investment advisers have a responsibility to provide this vital information, and BlackRock failed to do so with the Aviron investment.”
The order stated that BlackRock violated the Investment Advisers Act of 1940 and the Investment Company Act of 1940, and the firm agreed to a cease-and-desist order and censure without admitting or denying the SEC’s findings.
Previously, the SEC charged and then resolved its action against William Sadleir, the founder of Aviron, for misappropriating BIT funds invested in Aviron.
Elsewhere, Wells Fargo Advisors adds a $400 million Morgan Stanley veteran in Naples as an ex-Cetera advisor goes independent with LPL
According to a federal charges Bradley Heppner, 60, received more than $150 million in payments through funneling money from GWG Holdings to a shell company.
A $1B fund allegedly skimmed 30% off the top, then swapped cash for locked-up stock.
Insiders allegedly rewrote projections three times in four days.
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