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BlackRock Manager Facing Insider Trading Charges

BlackRock disputes the allegations and is defending the manager.

Jan 13, 2014

Italian authorities have accused a BlackRock (BLK) manager of insider trading and the firm is defending him.

Italy's Commissione Nazionale per le Societa e la Borsa (Consob) says BlackRock's chief investment officer of non-U.S. fundamental equity investing, Nigel Bolton, traded on nonpublic information when he sold shares of Italian oil and gas services company Saipem four days before a profit warning in January 2013. BlackRock says the allegations are unfounded and is contesting them.

A BlackRock spokesman said Bolton, who also serves as the head of European equities for the firm, sold BlackRock's entire stake in Saipem in a block trade on Jan. 25, 2013, after a Barclays analyst drastically cut his earnings forecast for the company before the market opened. That publicly available news came on the heels of a rash of other negative news, including the departure of the company's CEO and investigations into corrupt practices. After the market close on Jan. 29, 2013, Saipem cut its earnings guidance for the previous year and its shares tanked.

BlackRock's own investigation found no evidence of improper trading, the spokesman said.

Bolton, who manages about $14 billion in a variety of accounts for BlackRock, will continue running portfolios for the firm, including BlackRock EuroFund (MAEFX), as the case proceeds.

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