Defendant Name:
BlackRock Advisors, LLC
Defendant Type:
Subsidiary of Public Company
Public Company Parent:
BlackRock, Inc.
SIC Code:
6282
CUSIP:
09247X10
Document Reference:
IA-4065
Document Details
Legal Case Name
In the Matter of Blackrock Advisors, LLC and Bartholomew A. Battista
Document Name
Order Instituting Administrative and Cease-and-Desist Proceedings, Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 and Sections 9(b) and 9(f) of the Investment Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order
Document Date
20-Apr-2015
Document Format
Administrative Proceeding
Allegation Type
Investment Advisers/Investment Companies
Document Summary
On April 20, 2015, the SEC instituted settled administrative and cease-and-desist proceedings against Blackrock Advisors, LLC and Bartholomew A. Battista. According to the SEC: "This matter concerns investment adviser BlackRock's failure to disclose a conflict of interest involving the outside business activity of one of its portfolio managers. Daniel J. Rice, III was a well-known, long-standing top-performing energy sector portfolio manager. Rice joined BlackRock in 2005 and managed BlackRock energy-focused registered funds, private funds, and separate accounts. In 2007, Rice founded Rice Energy, L.P. -- a Rice family-owned-and-operated oil and natural gas production company. Rice was the general partner of Rice Energy and personally invested approximately $50 million in the company. Rice's three sons were the CEO, CFO, and VP of Geology of Rice Energy. In February 2010, Rice Energy formed a joint venture with Alpha Natural Resources, Inc. ('ANR'), a publicly-traded coal company held in the BlackRock funds and accounts managed by Rice. By June 30, 2011, ANR stock was the largest holding (9.4%) in the Rice-managed $1.7 billion BlackRock Energy & Resources Portfolio, primarily as a result of ANR acquiring two other public companies held in that portfolio. BlackRock knew of Rice's involvement with and investment in Rice Energy as well as the joint venture with ANR, but failed to disclose Rice's conflict of interest to the BlackRock funds' boards of directors or to BlackRock advisory clients."
Disgorgement & Penalty Information
Resolutions
Cease and Desist Order
Censured
Compliance Related Independent Consultant
Various undertakings
Monetary Penalties:
Civil Penalty
Individual:
$12,000,000.00
Shared:
Other Defendants in Action:
