Compliance
BlackRock Fined $340,000 For Preventing Former Employees From Whistleblowing
The firm consented to the SEC's order without admitting or denying the findings of the US regulator's investigation.
A US regulator has said BlackRock will pay a
$340,000 fine to settle charges that it forced exiting employees
to waive their ability to receive whistleblower awards.
More than 1,000 departing BlackRock employees signed separation
agreements that stated they “waive any right to recovery of
incentives for reporting of misconduct” in order to receive
payouts from the firm, according to the Securities and Exchange
Commission's order.
The New York-based asset manager added the provision in October
2011 after the financial watchdog adopted its whistleblower
program rules, and BlackRock continued using the wording in
separation agreements until March 2016, the SEC said.
BlackRock consented to the SEC's order without admitting or
denying the findings of the regulator's investigation.
“BlackRock took direct aim at our whistleblower program by using
separation agreements that removed the financial incentives for
reporting problems to the SEC,” said Anthony Kelly, co-chief of
the SEC enforcement division’s asset management unit, adding:
“Asset managers simply cannot place restrictions on the ability
of whistleblowers to accept financial awards for providing
valuable information to the SEC.”
