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.

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.