SEC Charges BlackRock $2.5 Million for Investment Misreporting – What’s Going On?
According to a Tuesday release from the U.S. Securities and Exchange Commission (SEC), BlackRock Advisors LLC has agreed to a $2.5 million penalty for failing to accurately describe investments in the entertainment industry.
The development is of particular interest as it coincides with speculation around BlackRock’s spot Bitcoin ETF.
According to the SEC
, from 2015 to 2019, BlackRock’s Multi-Sector Income Trust made substantial investments in Aviron Group, a firm that specialized in developing advertising plans for films. Despite the firm’s role in the trust’s portfolio, BlackRock mischaracterized Aviron as a “Diversified Financial Services” entity in multiple annual and semi-annual reports. Additionally, BlackRock claimed higher interest rates paid by Aviron than were actually the case. The discrepancies were later identified and corrected by BlackRock in 2019.
Aviron Group LLC was contracted to fund filmmaking on behalf of BlackRock and the S.E.C. decided to charge BlackRock immediately following a direct listing to the D.T.C.C. for… ( loophole ) improperly describing the investments on the contract with Aviron Group LLC.
Basically a… pic.twitter.com/GQQaA2RfRb
— Möbius (Founder of SWAG) (@SWAccelerated) October 25, 2023
The SEC’s investigation was led by Salvatore Massa and Brian Fitzpatrick under the supervision of Andrew Dean and Corey Schuster, all part of the Enforcement Division’s Asset Management Unit.
The SEC’s announcement against BlackRock occurred on the same day the firm’s spot Bitcoin ETF appeared on the Depository Trust & Clearing Corporation (DTCC) listing. Eric Balchunas, a senior Bloomberg ETF analyst, noted that the DTCC listing was “all part of the process” for bringing a Bitcoin ETF to market. The
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