Robertson of BlackRock Advisors LLC faces Conflict of Interest by SEC
Randy Robertson, a former portfolio manager for BlackRock Advisors, LLC, was charged by the Securities and Exchange Commission (SEC) today with failing to disclose a conflict of interest that arose as a result of his relationship with a film distribution company in which the fund that he managed for BlackRock invested millions of dollars.
The charge stems from the fact that Mr. Robertson had a prior business relationship with the film distribution company. Robertson reached a plea deal in which he admitted guilt and agreed to pay a fine of $250,000.
According to the order issued by the SEC, during the period of 2015 through 2019, BlackRock Multi-Sector Income Trust (BIT), which is a closed end publicly traded fund, made investments in Aviron Group, LLC subsidiaries by providing those subsidiaries with loans of up to $75 million. These subsidiaries were engaged in the business of funding advertising budgets for motion pictures.
Robertson, who was a co-portfolio manager at BIT, played an important part in the process of recommending and supervising the company’s loans to the Aviron subsidiaries. During the same time period, Robertson approached Aviron with a request to assist in the development of his daughter’s acting career.
Aviron was instrumental in securing a supporting part for Robertson’s daughter in a movie that was released in 2018. Robertson did not disclose to BIT’s board of trustees or to BlackRock’s compliance and legal teams that he had asked Aviron to help advance his daughter’s acting career or that Aviron had assisted his daughter in obtaining a film role. Neither did he disclose the fact that Aviron had helped his daughter obtain the role.
According to Andrew Dean, Co-Chief of the Enforcement Division’s Asset Management Unit, “Investment professionals must be forthcoming about any conflicts of interest they may have with the companies in which they invest client funds. This includes situations involving favors or assistance to family members.”
Investment professionals must be forthcoming about any conflicts of interest they may have with the companies in which they invest client funds.” “Investors need to have the ability to know for certain that the advice they are receiving does not contain any undisclosed conflicts of interest, regardless of whether or not the conflict is of a financial nature.
Robertson gave his assent to the entry of the SEC’s order finding that he violated Section 206(2) of the Investment Advisers Act of 1940. This was done with the understanding that Robertson would be held accountable for his actions. Robertson did not admit or deny the findings of the SEC; however, he did agree to the cease-and-desist order, the censure, and the $250,000 penalty that was mentioned earlier.
Salvatore Massa and Brian Fitzpatrick from the Enforcement Division’s Asset Management Unit in the New York Regional Office were the ones in charge of conducting the investigation for the Securities and Exchange Commission (SEC). They were supervised by Mr. Dean.
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