SEC sanctions former fund manager over conflict

U.S. regulators are sanctioning a former fund manager for failing to disclose a conflict of interest that arose when he sought help for his daughter’s acting career while directing fund investments to a film production company.

The U.S. Securities and Exchange Commission (SEC) settled charges with Randy Robertson, a former portfolio manager with BlackRock Advisors LLC, who agreed to a US$250,000 penalty to resolve the regulator’s allegations that he violated securities law.

Specifically, the SEC’s order found that Robertson failed to disclose a conflict of interest when he tried to advance his daughter’s acting career by seeking help for her from Aviron Group LLC while an investment fund that he co-managed — BlackRock Multi-Sector Income Trust — invested US$75 million in the company.

“Robertson played a primary role in identifying and selecting the Aviron investment and a significant role in overseeing the Aviron investment,” the SEC order said. “Before and during the time of the Aviron investment, Robertson requested generally that Aviron help his daughter’s career, and on occasions Aviron presented her with potential opportunities in the film industry.”

According to the SEC, “Aviron helped Robertson’s daughter obtain a small role in a film produced in 2018.”

Robertson did not disclose the conflict to the fund’s board or to BlackRock’s compliance and legal teams, the SEC said.

After the conflict was discovered, BlackRock terminated Robertson in February 2020.

“Investment professionals must be forthcoming about any conflicts of interest they may have with the companies in which they invest client funds, including situations involving favours or assistance to family members,” said Andrew Dean, co-chief of the SEC enforcement division’s asset management unit.

“Investors must be able to know that the advice they receive is free of undisclosed conflicts, regardless of whether the conflict is financial in nature,” he added.

Robertson consented to the entry of the SEC’s order, and agreed to the penalty, without admitting or denying the SEC’s findings.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.