SEC Charges Former BlackRock Portfolio Manager with Undisclosed Conflict of Interest

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 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 Andrew Dean, Co-Chief of the Enforcement Division’s Asset Management Unit. “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.”

Robertson consented to the entry of the SEC’s order finding that he violated Section 206(2) of the Investment Advisers Act of 1940. Without admitting or denying the SEC’s findings, Robertson agreed to a cease-and-desist order, a censure, and the $250,000 penalty referenced above.