Italy's securities regulator begins civil proceeding against BlackRock' money manager

January 10
10:54 PM 2014

BlackRock Inc said Italian securities regulator has initiated a civil proceeding against one of its money managers, Bloomberg reported. The regulator alleged that the manager utilized information not available publicly in order to avert €114.5 million or $156.5 million in losses for its clients in 2013, the report said.

The world's biggest asset manager, BlackRock gives institutional clients and retail investors diversified investment management services using various vehicles. Its offerings include the BlackRock Funds and BlackRock Liquidity Funds. For fixed income institutional investors, the company gives risk management services, Bloomberg data showed.

In a regulatory filing, BlackRock said Italy's Commissione Nazionale per le Societa e la Borsa or Consob had alleged that portfolio manager Nigel Bolton sold Saipem SpA's shares prior to announcing negative news, the report said. Bolton is also the head of the European Equity Team of BlackRock Investment Management Limited. The share sale happened from January 25 to January 29 last year. On January 30, 2013, Saipem, an oil and gas firm, dropped 34%.

BlackRock's New York-based Spokesman Brian Beades said in a statement, "Our portfolio manager made the decision to sell Saipem shares based on a growing wave of negative publicly available information that was widely disseminated in the marketplace. Insider trading is abhorrent to BlackRock's values, and we would never tolerate it."

The filing said that although BlackRock is not included in the charge in the investigation, it may still be held accountable for the actions of its employee. The asset manager also said that the probe is currently going on and that under Italian rules, the possible fine can exceed the loss avoided.

The filing revealed that BlacRock's European Equity team has an estimated $40 billion in assets. Of this amount, Bolton manages around $14 billion. The report said BlackRock manages $4.1 trillion in assets globally, the report said.

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