BlackRock, the world’s biggest money manager, said regulators are considering filing action against the firm over a former money manager who used BlackRock funds to invest in a company with which he had financial ties.
Bloomberg News reports that BlackRock said last week in a filing it received a Wells notice from the U.S. Securities and Exchange Commission on June 17 indicating the regulator’s staff is recommending action against a unit at the firm, which manages about $4.3tril.
The SEC 'has taken the preliminary view' that disclosures related to Daniel J. Rice III, who retired from BlackRock Advisors in 2012 as a portfolio manager, were “inadequate', the company said. BlackRock, which is based in New York, said it doesn’t believe it violated provisions mentioned by the SEC and it doesn’t expect any resolution of the matter to have a material impact on its financial results.
The SEC notice is the latest instance of regulatory scrutiny faced by BlackRock this year. In January, the firm disclosed that one of its employees, Nigel Bolton, was named in a civil proceeding by an Italian securities regulator alleging he used non-public information to avoid client losses.
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