BlackRock pays $2.5 million fine to SEC for misleading investors

abdelaziz Fathi

BlackRock Advisors has been fined $2.5 million by the U.S. Securities and Exchange Commission (SEC) for providing inaccurate descriptions of investments related to the entertainment sector within a publicly managed fund.


The SEC alleged that BlackRock inaccurately categorized Aviron as a company providing “Diversified Financial Services” in several of BIT’s annual and semi-annual reports, which were made available to its investors. Additionally, the SEC claimed that BlackRock misrepresented Aviron’s interest rate, stating it was higher than it actually was. However, BlackRock discovered these errors in 2019 and corrected the information about Aviron’s investment in subsequent years.

The SEC had previously charged Aviron founder William Sadleir of misappropriating BIT funds invested in his company, defrauding BlackRock Multi-Sector Income Trust of at least $13.8 million from the $75 million investment. These funds were allegedly misused for personal and business expenses. However, the SEC’s action against Sadleir has since been resolved.

Andrew Dean, co-chief of the enforcement division’s asset management unit at the SEC, said that investment advisers have a responsibility to provide accurate and essential information about the assets of the funds they manage. He stated, “BlackRock failed to do so with the Aviron investment.”

While this case is unrelated to the cryptocurrency, BlackRock, as the world’s largest asset manager, has attracted attention for its proposal to launch a spot Bitcoin exchange-traded fund (ETF).

The SEC’s charges against BlackRock for investment disclosure failures coincided with the notice of the listing of its spot Bitcoin ETF on the Depository Trust & Clearing Corporation (DTCC) listing. This development has led many to speculate that the approval for a spot Bitcoin ETF is imminent.

BlackRock’s bitcoin ETF application is highly anticipated, given its status as a $9 trillion asset manager with a strong track record of SEC approvals.

Despite the crypto winter, BlackRock has been increasing its exposure to digital assets space and blockchain technology. The asset manager made headlines in January after it added bitcoin as an eligible investment to its flagship Global Allocation Fund, which is one of the most preferred vehicles for ordinary and passive investors.

A company filing shows that the move enables BlackRock to allocate part of the fund’s $15 billion to cash-settled bitcoin futures traded on commodity exchanges registered with the CFTC. In December, the New York-based financial conglomerate announced the launch of its crypto ETF in Europe despite the regulatory concerns in the continent.

BlackRock also participated in a $400 million funding round for Boston-based fintech startup Circle. In addition to its investment and role as a primary asset manager of USDC cash reserves, BlackRock entered into a partnership with Circle to explore capital market applications for its stablecoin.

Read this next

Retail FX

Revolut eyes Big Four auditor as board frustrated by BDO remarks

British fintech firm Revolut is reportedly considering a change in its auditing firm following a warning in its last annual accounts, as audited by BDO.

Institutional FX

Börse Group’s 360T taps Virtu for TCA and trading analytics

Virtu Financial and Deutsche Börse Group’s FX platform, 360T, have teamed up to improve the foreign exchange trading experience for their clients.

Digital Assets

Bybit Surpasses 20 Million Users Milestone Ahead of 5-Year Anniversary

Celebrating its 5th anniversary in December of this year, Bybit announced that it has surpassed 20 million registered users, highlighting its growth and position in the industry.

Digital Assets

Changpeng Zhao leaves Binance.US as SEC ramps up scrutiny

Changpeng ‘CZ’ Zhao has resigned from his position as chairman of the board for Binance.US, distancing himself from the governance of the American division of the cryptocurrency exchange.

Digital Assets

M2 granted full license to operate multilateral trading facility in UAE

Cryptocurrency exchange M2 has been approved as a fully regulated Multilateral Trading Facility (MTF) and custodian, now authorized to engage with UAE retail and institutional clients.

Digital Assets

Court approves Voyager’s $1.65 billion settlement with FTC

A New York federal judge has given the nod to a settlement that holds Voyager Digital and its former CEO, Stephen Ehrlich, accountable for misleading investors about the safety of their funds.

Retail FX

Financial Safety First: Why Regulated Brokers Are Your Best Compass

Picture yourself on the brink of the expansive financial trading universe, poised and ready to jump. But what ensures your descent into this financial abyss is controlled and secure? The unspoken hero here is regulation. It serves as a safeguard, setting rules and standards that help you navigate the market with a greater sense of security and less risk of unforeseen losses.

Industry News

Obituary: Campbell Adams, founder of ParFX and Pure Digital, passes away

Campbell Adams’ pioneering spirit and his contributions to the development of the FX industry as well as the digital asset trading space will be remembered and valued by industry peers and the broader financial community.

Inside View

Will Europe lead the way in crypto derivatives market structure?

The envisioned future market structure aims to provide direct access to regulated venues, offering 24/7 trading, lower initial margin requirements, and efficient risk management through remote custody agreements. This model is not just about addressing the current challenges but is also geared towards leveraging the best practices from the crypto markets.