The United States Securities and Exchange Commission has fined BlackRock Advisors $2.5 million for incorrect investment disclosure. BlackRock failed to properly disclose its investments in the entertainment industry, which made up a sizeable amount of a fund it managed that was publicly traded.
Between 2015 and 2019, BlackRock Multi-Sector Income Trust (BIT) made a significant loan facility investment in the print and advertising company Aviron, which works on one to two films a year, according to the SEC’s filing.
The SEC stated that BlackRock had misrepresented Aviron as a provider of “Diversified Financial Services” in multiple BIT annual and semi-annual reports that were made available to investors.
Moreover, the SEC asserts that BlackRock falsely reported Aviron’s interest rate, misrepresenting it as higher than it was. However, these errors were found in 2019 by BlackRock, and BIT accurately reported the Aviron investment in reports going forward.
It is the responsibility of the investment adviser to deliver precise vital information about the assets of the fund managed, and “BlackRock failed to do so with the Aviron investment,” as stated by Andrew Dean, co-chief of the enforcement division’s asset management unit at the SEC.
In response to an inaccurate investment disclosure agreement, BlackRock consented to pay a $2.5 million fine. Recently, BlackRock has gained attention in the cryptocurrency space for its proposed iShares Spot Bitcoin ETF’s listing on the Depository Trust & Clearing Corporation (DTCC).
