BlackRock Advisors Fined $2.5M by SEC for Misrepresentation of Investment Details
Summary:
The US Securities and Exchange Commission (SEC) has levied a $2.5 million fine on investment advisor BlackRock Advisors, for inaccurately representing investments in the entertainment sector. The SEC accuses BlackRock of mislabeling Aviron Group, a print and advertising firm, as a "Diversified Financial Services" provider and overstating its interest rate in publicly accessible reports. Although unrelated to crypto, BlackRock has recently drawn attention for its proposed Bitcoin exchange-traded fund (ETF).
The U.S. Securities and Exchange Commission (SEC) has imposed a fine amounting to $2.5 million on BlackRock Advisors. This punitive action came as a result of the investment advisor's failure to accurately portray investments in the entertainment sector. This particular sector constituted a significant portion of a fund that BlackRock managed, and was publicly traded.
During the years 2015 to 2019, the company substantially invested in Aviron Group, a print and advertising firm serving one or two films annually. The investments were channeled through a loan facility within the BlackRock Multi-Sector Income Trust (BIT).
The SEC has accused BlackRock of misclassifying Aviron as a "Diversified Financial Services" provider in several of BIT’s annual and semi-annual reports - documents accessible to investors. The SEC has also accused BlackRock of misleading by overestimating Aviron's interest rate. However, these inaccuracies were identified and rectified by BlackRock in 2019.
SEC's enforcement division’s asset management unit co-chief, Andrew Dean, pointed out the obligation BlackRock holds to deliver precise critical information about the assets of the funds it manages. He added, their handling of the Aviron investment was a failure to meet this responsibility.
BlackRock has accepted the $2.5 million penalty for this incorrect investment disclosure. Although BlackRock's investment in Aviron was not related to crypto, the world's largest asset manager has been notably connected with the crypto sector due to its proposed Bitcoin (BTC) exchange-traded fund (ETF).
On the same day that the SEC charged BlackRock for its investment disclosure failure, its Bitcoin ETF was observed listed on the Depository Trust & Clearing Corporation (DTCC) - leading to speculation that approval for the Bitcoin ETF was imminent. But only hours later, confusion erupted in the crypto world when the listing was taken down, only to reappear quickly. A DTCC spokesperson later clarified that the listing of the iShares Bitcoin ETF has been active since August and does not signify any regulatory approval.
Published At
10/25/2023 9:46:58 AM
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