(Bloomberg) — BlackRock Inc. agreed to pay $12 million to settle regulatory claims that it failed to disclose a conflict of interest of a top portfolio manager.
Daniel J. Rice III, a former money manager, invested client money in Alpha Natural Resources Inc., which had entered into a joint venture with a company Rice founded, the Securities and Exchange Commission said in a statement Monday. BlackRock knew about and approved Rice's investment and failed to disclose the conflict to investors, the regulator said.
"BlackRock violated its fiduciary obligation to eliminate the conflict of interest created by Rice's outside business activity," Andrew Ceresney, director of the SEC's enforcement division, said in the statement.
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