The U.S. Securities and Exchange Commission (SEC) has slapped a $2.5 million fine on BlackRock Advisors, accusing the investment adviser of inadequately detailing investments in the entertainment sector that made up a substantial part of a fund it oversaw.
The SEC documents reveal that from 2015 to 2019, the BlackRock Multi-Sector Income Trust (BIT) invested significantly in a print and advertising entity named Aviron Group. This group was involved in financing one to two films each year via a loan mechanism.
The regulatory body contends that BlackRock wrongly categorized Aviron as offering “Diversified Financial Services” in several of BIT’s yearly and bi-yearly reports shared with the public. Furthermore, the SEC claims BlackRock overstated Aviron’s interest rate, implying it was greater than the actual figure. BlackRock recognized these mistakes in 2019 and amended the details about the Aviron investment in subsequent reports.
Andrew Dean, the co-head of the SEC’s enforcement division overseeing asset management, commented that it’s imperative for investment advisers to relay precise and essential data about fund assets. He pointed out that “BlackRock fell short in its portrayal of the Aviron investment.” BlackRock has consented to pay the $2.5 million fine for the investment disclosure misstep.
While this investment wasn’t linked to cryptocurrencies, the global top asset manager has recently been in the limelight regarding its prospective Bitcoin BTC current price $34,362 exchange-traded fund (ETF). On the same day BlackRock faced the SEC’s charges related to investment disclosure, its Bitcoin ETF was observed on the Depository Trust & Clearing Corporation (DTCC) listing.
This led many to speculate that an approval for the Bitcoin ETF is imminent. Bloomberg’s senior ETF analyst, Eric Balchunas, described the DTCC appearance as a standard step in introducing a crypto ETF. Yet, in a surprising turn, the Bitcoin ETF was delisted from DTCC, only to return a few hours later, puzzling the crypto sector. A statement from a DTCC representative clarified that the iShares Bitcoin ETF had been on their platform since August, emphasizing that this wasn’t a sign of regulatory endorsement.
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