INDIANAPOLIS — Via the Indiana Securities Division, Indiana Secretary of State Diego Morales issued a Summary Cease and Desist Order on Thursday against BlackRock, Inc.
The investment company is known for being the world's largest asset manager, as well as an investment company with multinational coverage. It also provides exchange-traded funds (ETFs) and promotes what is known as ESG factors (environmental, social and governance) on portfolio companies.
However, the Securities Division argues that the assertions BlackRock has made in relation to their ESG products are often false and misleading. The company is accused of telling clients their financial prospects and outcomes would be better in the long run through ESG-backed funds, but Morales stated there is little to no evidence to back that up.
On the other hand, BlackRock claims their funds that are not marketed as ESG do not follow an ESG investment strategy. With that said, they have issued several statements and actions committed to using all of their managed assets, while incorporating ESG considerations. This includes working towards zero carbon emissions, a press release said.
Speaking on the issue, Diego Morales stated "Investment companies that engage in fraudulent activities not only betray the trust of their clients but undermine the integrity of our financial markets." He then added that his office "...is committed to rigorously enforcing the
law and strengthening our regulatory frameworks to ensure Hoosier investors are protected and that those who exploit the system are held accountable".
For more information on this Cease and Desist Order or further questions regarding investments, please contact the Indiana Securities Division at (317) 232-6681.