BlackRock, Inc. Rotten Score Breakdown

The U.S. Securities and Exchange Commission charged BlackRock Advisors LLC in April 2015 with breaching its fiduciary duty by failing to disclose a significant conflict of interest involving one of its top-performing portfolio managers. According to the SEC, the portfolio manager founded and personally invested approximately $50 million in a family-owned energy company while simultaneously managing energy-focused funds for BlackRock. A joint venture involving that company eventually became the largest holding in one of the BlackRock funds managed by the portfolio manager, representing nearly ten percent of the approximately $1.7 billion fund. The SEC found that BlackRock knew about and approved the portfolio manager's outside business involvement. However, BlackRock failed to adequately disclose the conflict of interest to the boards of the funds or to advisory clients. The SEC also found that BlackRock failed to adopt and implement adequate written policies and procedures concerning the outside activities of employees. BlackRock agreed to be censured and to cease and desist from future violations. The company also agreed to retain an independent compliance consultant to conduct a review of its policies and procedures concerning employee outside activities and conflicts of interest. BlackRock paid a $12 million civil monetary penalty to resolve the enforcement action. Primary source: U.S. Securities and Exchange Commission — BlackRock Charged With Failing to Disclose Conflict of Interest: https://www.sec.gov/newsroom/press-releases/2015-71

In November 2024, Friends of the Earth US and the Articulation of Indigenous Peoples of Brazil (APIB) filed an OECD complaint against BlackRock, alleging the company contributed to environmental destruction and human rights abuses through investments in agribusiness companies linked to deforestation and Indigenous land-rights violations. The complaint alleges BlackRock increased investments in companies associated with Amazon deforestation, biodiversity loss, and violence against Indigenous communities despite repeated public warnings and years of advocacy pressure. Public sources: https://www.theguardian.com/environment/2024/nov/20/blackrock-climate-human-rights https://www.oecdwatch.org/complaint/friends-of-the-earth-us-and-the-articulation-of-indigenous-peoples-of-brazil-apib-vs-blackrock/