Amid Bitcoin ETF rumors, BlackRock stumbles paying $2.5M in SEC charges for investment misreporting other fund
Amid a bullish market for Bitcoin and anticipation of a spot exchange-traded fund (ETF) on the horizon, BlackRock, one of the world’s leading investment advisers, has been charged by the Securities and Exchange Commission (SEC) for failing to report significant investments made by a publicly traded fund accurately it advised.
According to the SEC, BlackRock has agreed to pay a $2.5 million penalty to settle the charges without admitting or denying the findings.
The SEC’s order, released on Oct. 24, finds that between 2015 and 2019, BlackRock Multi-Sector Income Trust (BIT) mischaracterized its substantial investments in Aviron Group, LLC. Although Aviron, which developed print and advertising plans for one to two films per year, played a considerable role in the fund’s portfolio, BlackRock reportedly described the company as a “Diversified Financial Services” entity in several of BIT’s annual and semi-annual reports.
Moreover, BlackRock allegedly claimed that Aviron paid a higher interest rate than what was the case. The discrepancies were identified by BlackRock in 2019, and the investment in Aviron was accurately reported in subsequent documents. Salvatore Massa and Brian Fitzpatrick conducted the SEC’s investigation under the supervision of Andrew Dean and Corey Schuster, all with the Enforcement Division’s Asset Management Unit.
Andrew Dean, Co-Chief of the Enforcement Division’s Asset Management Unit, stated.
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