By Stephen Jewkes and Chris Vellacott
LONDON/MILAN Jan 10 BlackRock Inc said
on Friday that Italy's market regulator has started civil
proceedings against one of its fund managers alleging that he
used inside information to sell shares in Saipem just
before the oil services firm issued a profit warning in 2013.
Consob, the Italian securities regulator, claimed that Nigel
Bolton, a portfolio manager and head of BlackRock Investment
Management (UK) Ltd's European Equity Team, used non-public
information when he sold more than 2 percent, or about 10.7
million, of Saipem's stock last January.
"While BlackRock is not charged in the proceeding, it may be
liable for the actions of its employee," the world's biggest
money manager said in a regulatory filing late Friday, adding
that it does not believe that Bolton will be found liable.
The sales that BlackRock said took place between Jan. 25 and
29, preceded Saipem's announcement on the 29th that it was
cutting its 2012 outlook. That move sparked a more than 30
percent slump in the Italian company's shares.
The regulator claimed the sale avoided over 114.5 million
euros ($156.54 million) in BlackRock client losses.
Following an internal investigation, BlackRock said it
believes the sale was made based on widely disseminated, public
information, including a third-party analyst research report
reducing Saipem's earnings estimates.
"Insider trading is abhorrent to BlackRock's values, and we
would never tolerate it," the investment firm said in an emailed
statement in response to an earlier Reuters report that the
regulator had launched a probe.
BlackRock in its filing said Consob also alleged that the
firm declined to provide it with information and was an obstacle
to the regulator's investigation.
The fund manager said it believes it has fully cooperated
with Consob, and that it will continue to do so.
Consob opened an initial probe into the profit warning and
subsequent share sales last February.
Consob declined to comment on Friday. Saipem, which is 43
percent owned by Italian oil major Eni, also declined
Saipem, which cut its outlook for a second time in June, is
embroiled in a corruption probe over allegations it paid bribes
to win contracts in Algeria. Saipem has denied any wrongdoing.
News of that probe, which emerged in December 2012, led to
the ousting of Saipem's long-standing chief executive Pietro
Franco Tali and his replacement by Umberto Vergine.
The corruption allegations, along with concerns that a new
management team could uncover more bad news, prompted several
funds to sell their shares in the oil services company at the
end of 2012.
BlackRock shares closed at $314.94 on Friday on the New York