SEC Fines BlackRock $2.5 Million for False Investment Disclosure
26 Oct, 2023 ● Crypto News
The US Securities and Exchange Commission (SEC) fined BlackRock Advisors $2.5 million for failing to accurately describe investments in the entertainment industry that made up a significant portion of a publicly traded fund it managed.
According to the SEC filing, between 2015 and 2019, BlackRock Multi-Sector Income Trust (BIT) made significant investments in Aviron Group which is a print and advertising company that worked on one to two films per year via a loan facility.
The SEC claimed that BlackRock incorrectly referred to Aviron as a provider of "Diversified Financial Services" in a number of BIT's annual and semi-annual reports made public to investors.
The SEC also charged BlackRock with misrepresenting Aviron's interest rate by claiming it was higher than it was. However, the asset manager discovered these errors in 2019 and corrected Aviron's investment information in subsequent years.
According to Andrew Dean, co-chief of the SEC's asset management division's enforcement division, investment advisers have a responsibility to provide accurate vital information about the assets of the funds they manage, and "BlackRock failed to do so with the Aviron investment."
BlackRock agreed to pay a $2.5 million penalty for violating the investment disclosure agreement. Despite the fact that the investment had nothing to do with the crypto ecosystem, the world's largest asset manager has been in the news for its proposed spot Bitcoin exchange-traded fund.
The SEC's charges against BlackRock for investment discourse failure came on the same day that its spot Bitcoin exchange-traded fund (ETF) was discovered listed on the Depository Trust & Clearing Corporation (DTCC), leading many to believe spot Bitcoin approval is imminent.