- The U.S. Securities and Exchange Commission charged BlackRock for failing to disclose $75 million in investments in the entertainment industry.
- The investments were made by a BlackRock manager who had a personal connection to the film company.
- The manager’s daughter received a small role in one of the films financed by BlackRock.
- The film company ultimately went under, resulting in a loss for the BlackRock fund.
- The manager was fired and charged by the SEC for failing to disclose the conflict of interest.
- The film company’s owner was charged with a larger fraud scheme involving BlackRock’s investments.
- The owner pleaded guilty and was sentenced to prison.
- The SEC’s handling of BlackRock’s involvement in the fraud raises questions about how financial firms address internal wrongdoing.
The U.S. Securities and Exchange Commission has announced that it charged BlackRock, the world’s largest money manager, with failing to disclose $75 million in investments it made in the entertainment industry. The investments were made by a BlackRock manager who had a personal connection to the film company, making the situation all the more intriguing.
It all started with a peculiar set of circumstances. The manager’s daughter was an aspiring actress, and the manager decided to make aggressive investments, totaling $75 million, in subsidiaries of a private Hollywood film production company called Aviron Group LLC. These investments were made shortly after the manager introduced his daughter to the film company’s owner.
The manager’s daughter did receive a small speaking role in one of the films financed by BlackRock, but the film ultimately flopped, and the film company defaulted on its $75 million in loans. This resulted in a loss for the BlackRock fund, which still hasn’t fully recovered. The manager was found out and subsequently fired in 2020. The SEC charged him for failing to disclose his conflict of interest, and he agreed to pay $250,000 to settle the charges.
But the story doesn’t end there. It turns out the film company’s owner had his own fraudulent plans. He misled BlackRock about what he was doing with the investments and even forged a BlackRock manager’s signature. He used the funds for personal expenses, including purchasing a $14 million mansion in Beverly Hills. The owner pleaded guilty to wire fraud and was sentenced to six years in prison.
The SEC’s handling of BlackRock’s involvement in the fraud raises questions about how financial firms address internal wrongdoing. While the firm was also a victim in this case, it still faced regulatory action. This highlights the challenges financial firms face in rooting out and reporting wrongdoing without risking punishment themselves when it is disclosed.
Overall, this Hollywood drama serves as a reminder of the risks and complexities involved in the entertainment industry and the importance of proper disclosure and compliance in financial firms.
The U.S. Securities and Exchange Commission has announced that it charged BlackRock, the world’s largest money manager, with failing to disclose $75 million in investments it made in the entertainment industry. The investments were made by a BlackRock manager who had a personal connection to the film company, making the situation all the more intriguing.
It all started with a peculiar set of circumstances. The manager’s daughter was an aspiring actress, and the manager decided to make aggressive investments, totaling $75 million, in subsidiaries of a private Hollywood film production company called Aviron Group LLC. These investments were made shortly after the manager introduced his daughter to the film company’s owner.
The manager’s daughter did receive a small speaking role in one of the films financed by BlackRock, but the film ultimately flopped, and the film company defaulted on its $75 million in loans. This resulted in a loss for the BlackRock fund, which still hasn’t fully recovered. The manager was found out and subsequently fired in 2020. The SEC charged him for failing to disclose his conflict of interest, and he agreed to pay $250,000 to settle the charges.
But the story doesn’t end there. It turns out the film company’s owner had his own fraudulent plans. He misled BlackRock about what he was doing with the investments and even forged a BlackRock manager’s signature. He used the funds for personal expenses, including purchasing a $14 million mansion in Beverly Hills. The owner pleaded guilty to wire fraud and was sentenced to six years in prison.
The SEC’s handling of BlackRock’s involvement in the fraud raises questions about how financial firms address internal wrongdoing. While the firm was also a victim in this case, it still faced regulatory action. This highlights the challenges financial firms face in rooting out and reporting wrongdoing without risking punishment themselves when it is disclosed.
Overall, this Hollywood drama serves as a reminder of the risks and complexities involved in the entertainment industry and the importance of proper disclosure and compliance in financial firms.