The Securities and Exchange Commission (SEC) has charged BlackRock Advisors, LLC for failing to accurately describe investments in the entertainment industry that comprised a significant portion of a publicly traded fund it advised. According to the decision made by the SEC, BlackRock Multi-Sector Income Trust (BIT) made significant investments in Aviron Group, LLC, which was responsible for producing promotional materials for two movies each year. 

According to the order issued by the SEC, BlackRock erroneously classified Aviron as a "Diversified Financial Services" business in multiple BIT annual and semiannual reports. According to the decision issued by the SEC, BlackRock also made a false statement that the interest rate offered by Aviron was higher than it actually was. Following the discovery of the errors by BlackRock in 2019, BIT quickly made the necessary corrections to its reporting of the Aviron investment. A decision reached by the Securities and Exchange Commission (SEC) found that BlackRock had violated the Investment Advisers Act of 1940 as well as the Investment Company Act of 1940, and BlackRock concurred with the SEC's findings. 

According to Andrew Dean, co-chief of the Enforcement Division's Asset Management Unit, retail and institutional investors rely on correct disclosures of the companies that make up the fund's portfolio when selecting whether or not to invest in a closed-end or mutual fund. These disclosures are used to determine whether or not to invest in a fund. "Investment advisers have a responsibility to provide this vital information, and BlackRock failed to do so with the Aviron investment."

In order to carry out the SEC's investigation, Salvatore Massa and Brian Fitzpatrick, both of whom are members of the Asset Management Unit within the Enforcement Division, worked diligently under the direction of Mr. Dean and Corey Schuster.