BlackRock Hit With Record Fine By German Regulator BaFin

By Eyk Henning 

FRANKFURT--German financial watchdog BaFin on Friday slapped a record fine of EUR3.25 million ($3.5 million) on BlackRock Inc. for misrepresenting its stakes in almost 50 of the country's largest companies over several years.

BlackRock, the world's largest asset manager by assets under management, restated its holdings in the relevant companies last September. At the time, it said a review conducted with BaFin led to its having to amend information on voting rights and holdings in financial instruments "since individual disclosures made in the past were not correct or had been omitted."

BlackRock corrected disclosures on its holdings in 48 companies listed on Germany's benchmark DAX and midcap MDAX indexes, including Allianz SE and Deutsche Bank AG.

"BlackRock accepts the fine announced today and is pleased to have fully resolved this matter," the company said in a statement.

The BlackRock fine is the largest BaFin has ever imposed, and comes after recent regulatory changes gave it the power to impose fines of up to EUR1 million ($1.06 million) for each instance in which an investor violates notification rules on voting rights.

Critics have in the past labeled the regulator as toothless, while lawyers have criticized Germany's disclosure rules as complex.

BlackRock has been punished for misrepresenting stakes in European companies before. Italian regulator Consob last summer imposed a EUR150,000 fine on BlackRock for misrepresenting its stake in lender UniCredit SpA back in 2011.

BlackRock's assets under management grew to $4.65 trillion at the end of December, largely due to asset appreciation and inflows to its exchange-traded funds.

BlackRock currently holds around 6.2% in Deutsche Bank, and is the largest investor in German blue-chip companies included in the DAX, the investor relations association, DIRK, said in a note published last June.

Write to Eyk Henning at [e-mail]

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