BlackRock has launched a staunch defence of its head of European equities Nigel Bolton and dismissed allegations he engaged in insider dealing.
BlackRock’s defence of Mr Bolton comes after the Italian financial services regulator brought a legal claim over a €315m trade last January.
According to FTAdviser sister publication the Financial Times, the action, brought by Italy’s Commissione Nazionale per le Societa e la Borsa (Consob), alleges Mr Bolton acted on "non-public information” when he sold shares in oil services company Saipem.
The day after the trade took place, a damning profit warning was published that caused shares in the company to plummet. The investors who bought Saipem shares from BlackRock lost more than €114.5m, according to Consob.
BlackRock firmly rejected that the sale was based on insider information, saying it was rather a reaction to “a growing wave of negative publicly available information that was widely disseminated in the marketplace”.
The firm added that the timing of the sale the day before a profit warning “is not evidence of insider trading”.
Saipem’s warning in January stated earnings before interest and tax for this year would be €750m, around half of an expected €1.5bn, and that net profit would be €450m. In June, this was revised again to a net loss of €300m to €350m. The company is also mired in a corruption investigation in Algeria.
A spokesperson said: “Our portfolio manager made the decision to sell Saipem shares based on a growing wave of negative publicly available information that was widely disseminated in the marketplace. It was a decision that was made as a fiduciary on behalf of our clients.
“Insider trading is abhorrent to BlackRock’s values, and we would never tolerate it. The mere fact that shares were sold shortly before a profit warning is not evidence of insider trading, particularly when the information on which the trade was made was widely available in the marketplace.
“BlackRock conducted a thorough investigation and found there is no evidence to support the allegations.”
The Consob claim also alleges that BlackRock did not co-operate fully with the investigation and failed to provide information that was request, which the fund manager also denies.
A BlackRock spokesman said: “We believe we have fully cooperated with Consob, and we will continue to do so. We look forward to working with Consob to resolve this situation. None of our clients nor any of our funds will be affected by these proceedings.”
Mr Bolton was promoted in February of last year and in addition to his European equity role he is now chief investment officer across the EMEA and Asia regions. He is co-manager of the offshore BGF European and BGF European Focus funds.