The SEC recently charged a former BlackRock portfolio manager for failing to disclose a conflict of interest. The portfolio manager was found to have requested and received favors from a holding company’s subsidiaries on behalf of a family member. The individual failed to disclose this fact to the firm or to the fund’s board. Although the SEC did not identify any harm to investors, the individual involved was subject to censure, cease-and-desist, and a $250,000 penalty.
“The SEC’s order finds that, from 2015 to 2019, BlackRock Multi-Sector Income Trust (BIT), a closed end publicly traded fund, invested in Aviron Group, LLC subsidiaries by loaning the subsidiaries, which were in the business of funding advertising budgets of motion pictures, as much as $75 million. Robertson, a co-portfolio manager of BIT, had a significant role recommending and overseeing BIT’s loans to the Aviron subsidiaries. At the same time, Robertson asked Aviron to help advance his daughter’s acting career. Aviron helped Robertson’s daughter obtain a small role in a film produced in 2018. Robertson did not disclose to BIT’s board of trustees or BlackRock’s compliance and legal teams that he asked Aviron to help advance his daughter’s acting career or that Aviron helped his daughter obtain a film role.”
Investment advisers are required to have written policies and procedures that are reasonably designed to monitor and mitigate all potential conflicts of interests at the firm. It is not enough for advisers to simply have established written policies and procedures, they must also disclose any conflicts involving the investment of client assets, including potential situations that may provide favors or benefits to family members and acquaintances.
The SEC3 compliance consulting team can assist with not only establishing reasonably designed policies and procedures, but also monitor and mitigate potential conflicts of interests at your firm. For more information, please contact us at info@seccc.com, at (212) 706-4029 or visit us on our website at www.seccc.com.
For over two decades, we have been providing compliance consulting services and servicing as outsourced Chief Compliance Officers. Our professionals have served as SEC regulators and in senior leadership, guiding the industry’s principal compliance association. Our consultants also have hands-on industry experience as chief compliance officers, experienced securities attorneys and senior management of investment advisers, broker-dealers and fund administrators.
What can SEC3 do for you?
SEC3 offers an extensive suite of customizable compliance services for investment advisers, private fund advisers, CPOs, CTAs, investment companies, institutional investors and broker-dealers which can complement your internal compliance program on a one-time or recurring basis depending on your needs.
Call us today at (212) 706-4029 x 229, or shoot us an email at info@SEC3compliance.com so we can set up a time for one of our consultants to discuss your needs and how we can help.
