The SEC today charged BlackRock Advisors, LLC for failing to properly disclose investments that comprise a significant portion of a publicly traded fund it advises. This is according to an SEC statement released today. In particular, the investments are within the entertainment industry.
To settle the charges, BlackRock is agreeing to pay a $2.5 million penalty. The SEC’s order finds that, from 2015 to 2019, BlackRock Multi-Sector Income Trust (BIT) made significant investments, through a lending facility, in Aviron Group, LLC. Aviron is a company that developed print and advertising plans for one to two films per year.
The order adds that “in many of BIT’s annual and semi-annual reports that were publicly available to investors and filed with the SEC, BlackRock inaccurately described Aviron as a “Diversified Financial Services” company.” In response to the order, BlackRock agreed to a cease-and-desist order and a censure in addition to the monetary penalty. However, the company did not admit or deny the SEC’s findings.
“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,” said Andrew Dean, Co-Chief of the Enforcement Division’s Asset Management Unit. “Investment advisers have a responsibility to provide this vital information, and BlackRock failed to do so with the Aviron investment.”
BlackRock and its representatives have yet to comment publicly on the latest SEC findings.