BREAKING: BlackRock to pay $2.5 million penalty after SEC charges it with failing to disclose investment

• BlackRock faced charges from the SEC for misreporting investments in Aviron Group from 2015-2019.
• The world’s largest asset management firm agreed to pay a $2.5 million penalty in order to settle the charges.
• BlackRock recently caused a surge in cryptocurrency prices after its spot Bitcoin ETF was listed on DTCC.

The Securities and Exchange Commission announced on October 24 that it charged BlackRock for failing to declare investments in the entertainment industry accurately. The firm is the largest asset manager in the world, with over $9.43 trillion worth of assets under its management as of Q2 2023.

BlackRock charged by the SEC

Per the charges, from 2015 to 2019, BlackRock made investments through a lending facility in Aviron Group for one to two films per year. BlackRock stated that Aviron paid a higher interest rate than was actually the case, and in 2019, the asset manager identified these inaccuracies and accurately reported the Aviron investment in reports going forward.

The SEC’s Co-Chief of the Enforcement Division’s Asset Management Unit, Andrew Dean, in the press release stated,

“Retail and institutional investors rely on accurate disclosures of the companies that make up a closed-end or mutual fund’s portfolio to evaluate a current or prospective investment in the fund. Investment advisers have a responsibility to provide this vital information, and BlackRock failed to do so with the Aviron investment.

In response to the charges, without admitting or denying them, BlackRock agreed to a cease and desist order. This also included the firm paying a penalty of $2.5 million to settle the charges.

BlackRock faces a black Tuesday

Before the day could end, BlackRock not only faced the charges from the SEC but also witnessed disappointment on the crypto front. The asset manager’s spot Bitcoin Exchange Traded Fund (ETF) - iShares Bitcoin Trust - was delisted from the Depository Trust & Clearing Corporation (DTCC) website.

The ETF first popped up in the list on Monday, and given that DTCC provides clearing and settlement services for the financial markets, including the likes of NASDAQ, crypto enthusiasts rushed to assume that the ETF would soon be up for approval. This resulted in a nearly 20% rally in three days, which led to the crypto market noting inflows of almost $200 billion at one point.

Read more - End of ‘longest bear market in history’ may be a sham as BlackRock Bitcoin DTCC listing disappears

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