Reuters logo
UPDATE 1-U.S. SEC weighs filing charges against BlackRock-filing
June 27, 2014 / 9:27 PM / 3 years ago

UPDATE 1-U.S. SEC weighs filing charges against BlackRock-filing

(Adds background about the portfolio manager, details on SEC probe, comment from company)

By Sarah N. Lynch

WASHINGTON, June 27 (Reuters) - BlackRock Inc, one of the world’s largest asset managers, disclosed on Friday that it may face civil charges by a U.S. securities regulator over disclosures tied to a former portfolio manager whose personal investments suggested a possible conflict of interest.

In a regulatory filing, BlackRock said its BlackRock Advisors LLC unit received a “Wells Notice” from the U.S. Securities and Exchange Commission.

A Wells notice is usually the last step in an SEC investigation before a civil enforcement action is filed, and gives a recipient one last chance to convince regulators not to file a lawsuit.

BlackRock said it intends to cooperate with the SEC, and explain why no enforcement action is necessary.

The investigation is tied to the personal investments of Daniel Rice, who left BlackRock in June 2012 over concerns about a potential conflict involving his family business and holdings in the firm’s energy mutual funds.

The potential conflict stemmed from a joint venture with Alpha Natural Resources and a subsidiary of a natural gas drilling company founded by Rice.

In Friday’s filing, BlackRock said it had found no evidence of improper trading in Rice’s portfolios and that no clients had been harmed.

It said the June 17 Wells notice suggests the SEC has concerns with BlackRock’s disclosures related to Rice, and with the company’s policies and procedures.

BlackRock said any civil enforcement action would likely allege possible violations of anti-fraud laws and rules governing compliance programs.

“BlackRock put in place a number of additional specific measures in order to manage any potential conflicts of interest given Mr. Rice’s situation,” spokesman Brian Beades said.

“BlackRock has further enhanced its compliance policies and procedures as our business and industry evolve and in keeping with best practice.” (Reporting by Sarah N. Lynch in Washington; Additional reporting by Ashley Lau in New York; Editing by Sandra Maler)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below