SEC fines BlackRock $2.5 million for inaccurate disclosures
The US Securities and Exchange Commission (SEC) has fined BlackRock Advisors LLC, the world's largest asset manager, $2.5 million for making inaccurate investment disclosures.
The SEC filings relate to BlackRock's investments in Aviron Group, an entertainment company, between 2015 and 2019.
BlackRock would neither admit nor deny the SEC's findings.
BlackRock, which manages more than $9.43 trillion in assets, has disclosed Aviron to investors and regulators, according to an SEC filing. Asset manager Aviron denied the interest rate as a “diversified financial services” company, an advertising planner for films.
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Andrew Dean, Associate Chief of the Asset Management Division of the SEC's Enforcement Division, said:
“Retail and institutional investors rely on the accurate disclosures of the companies that make up the closed-end or mutual fund portfolio to evaluate the current or future investment in the fund. Investment advisors are responsible for providing this important information, and BlackRock failed to do so with Aviron Investments.
Additionally, the SEC's order emphasized that BlackRock identified these errors in 2019. Subsequently, they reported Aviron's investment accurately on all accounts. Without admitting guilt, BlackRock accepted the SEC's order, including a cease and desist, reprimand and fine.
The SEC plays hardball
This case represents significant progress in the SEC's ongoing efforts to enforce accurate investment disclosures. The BlackRock fine highlights the importance of transparency in investment management and the problems of providing inaccurate information.
Read more: Why the Crypto Market Didn't Realize the Bullish Potential of Spot Bitcoin ETFs
In related news, BlackRock's iShares Bitcoin Trust (IBTC) has reappeared on the Depository Trust & Clearing Corporation's website. It has been listed since August, according to a DTCC spokesperson. Adding a security clearance certificate from the National Securities Clearing Corporation (NCCC) to DTCC is a standard step before launching a new ETF.
The list includes active and potential ETF securities.
The ETF's appearance on the list means that an agent bank has applied for DTCC's account, and DTCC can process the transaction after SEC approval. However, this does not imply any outcome with respect to pending regulatory approvals.
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