BlackRock fined $2.5M by SEC for misrepresentation of investments.

The U.S. Securities and Exchange Commission has fined investment adviser BlackRock Advisors $2.5 million for failing to properly disclose a significant stake in a publicly traded fund that manages investments in the entertainment industry.

According to an SEC filing, Between 2015 and 2019, BlackRock Multi-Sector Income Trust (BIT) made a large investment through a credit facility in Aviron Group, a publishing and advertising business that produces one to two films each year.

The SEC wrongly referred to BlackRock Aviron as a company providing “various financial services” in several of BIT's annual and semi-annual reports to investors. The SEC also alleged that BlackRock misrepresented Aviron's interest rates as higher than they actually were. However, the asset manager discovered these errors in 2019 and corrected information about Aviron Investments in subsequent years.

Andrew Dean, general manager of the asset management division of the SEC's enforcement division, said investment advisers have a responsibility to provide accurate information about the assets of the funds they manage, and “BlackRock failed to do so with its Aviron investment.” He said.

BlackRock has agreed to pay a $2.5 million fine for improper investment disclosures. Although the investment is not related to the crypto ecosystem, the world's largest asset manager has been in the crypto spotlight for its proposed Bitcoin (BTC) exchange-traded fund (ETF).

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The SEC's indictment against BlackRock for the failure of its investment discourse has prompted many to believe that Bitcoin's validation is imminent as its position as a Bitcoin exchange-traded fund (ETF) is listed on the Depository Trust & Clearing Corporation (DTCC).

Senior Bloomberg ETF analyst Eric Balchunas called the DTCC listing “all part of the process” of bringing a crypto ETF to market. However, within hours of the DTCC listing, the spot Bitcoin ETF was removed from the platform and reappeared within hours, causing confusion among the crypto community. However, a DTCC spokesperson later confirmed that the iShares Bitcoin ETF had been listed on the platform since August and said the move did not indicate any regulatory approval.

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