BlackRock Unit Gets SEC Wells Notice Over Former Employee

(RTTNews) - Asset manager BlackRock, Inc. (BLK) said in a regulatory filing that its subsidiary BlackRock Advisors, LLC has received a written "Wells Notice" from the United States Securities and Exchange Commission over the unit's former employee Daniel Rice III, who left the firm in 2012.

In June 2012, BlackRock Advisors said Rice would no longer serve as a portfolio manager for the BlackRock Energy & Resources Portfolio to address ''any perception of a potential conflict of interest as a result of his personal investments and involvement in a family business, Rice Energy LP and related entities.''

The company also concluded that there was no improper trading within the portfolios managed by Rice and that no clients were harmed.

BlackRock Advisors further said Rice would retire, which he did in December 2012. Since 2012, BlackRock Advisors has cooperated with the staff of the SEC in an investigation of this matter.

A Wells Notice is neither a formal allegation of wrongdoing nor a finding that BlackRock Advisors violated any law. According to the company, it provides BlackRock Advisors an opportunity to respond to issues raised by the SEC staff and offer its perspective prior to any SEC decision.

BlackRock said SEC staff has taken the preliminary view that BlackRock Advisors' disclosure and its policies and procedures were inadequate.

BlackRock Advisors will continue to cooperate fully with the SEC's inquiry and plans to make a submission to the SEC staff setting forth why no action should be commenced against it.

The company does not expect any resolution of the matter to have a material adverse effect on its financial results or operations.

BLK closed up 0.6 percent on Friday at $317.09.