SEC Charges Ex-BlackRock Portfolio Manager with Undisclosed Conflict of Interest

The Securities and Exchange Commission (SEC) has charged a former BlackRock Advisors portfolio manager for failure to disclose a conflict of interest involving his relationship with a film distribution company.

The SEC’s order found that from 2015 to 2019, BlackRock Multi-Sector Income Trust (BIT) invested millions of dollars in Aviron Group, with defendant Randy Robertson playing a significant role in recommending and overseeing the investment. At the same time, Robertson allegedly asked Aviron to help advance his daughter’s acting career and Aviron helped her obtain a small role in a film produced in 2018. Robertson did not disclose these conflicts of interest to BIT’s board of trustees or BlackRock’s compliance and legal teams.

To settle the charges, Robertson agreed to pay a $250,000 penalty and has consented to a cease-and-desist order, a censure, and the aforementioned penalty, without admitting or denying the SEC’s findings. The SEC’s investigation was conducted by Salvatore Massa and Brian Fitzpatrick under the supervision of Andrew Dean, Co-Chief of the Enforcement Division’s Asset Management Unit in the New York Regional Office.

“Investment professionals must be forthcoming about any conflicts of interest they may have with the companies in which they invest client funds, including situations involving favors or assistance to family members,” said Dean. “Investors must be able to know that the advice they receive is free of undisclosed conflicts, regardless of whether the conflict is financial in nature.”