BlackRock (BLK) disclosed in an 8-K filing that on June 17 the world’s biggest money manager received a “Wells Notice” from the U.S Securities and Exchange Commission [SEC] indicating the regulator’s staff is considering filing action against the firm over a former portfolio manager who used BlackRock funds to invest in a company with which he had financial ties.
A Wells Notice is a letter that the SEC sends to a company or an individual when it’s planning to bring an enforcement action against them.
In the 8-K filing, BlackRock said the Wells pertains to high-profile energy money manager Daniel J. Rice III, who retired from BlackRock Advisors in 2012.
BlackRock said Rice retired to address any perception of a potential conflict of interest because of his involvement with his family’s natural gas company, Rice Energy Inc. (RICE).
Rice became a billionaire in January of this year after the company he founded in 2007 became publicly traded, Bloomberg News reported.
BlackRock, which is based in New York, stated “it does not expect any resolution of the matter to have a material adverse effect on its financial results or operations.” The firm also said that it does not believe it violated any provisions mentioned by the SEC.
Shares in both BlackRock and Rice Energy Inc closed at $317.09 and $30.48, respectively, on Friday.