BlackRock accused of fraudulent ESG claims

Mississippi is seeking to stop BlackRock’s alleged fraudulent actions and impose a multimillion-dollar administrative penalty.

Mississippi Secretary of State Michael Watson and the Securities Division of the Secretary of State’s Office have issued a Summary Cease and Desist Order and Notice of Intent to Impose Administrative Penalty against BlackRock.

The Securities Division alleges BlackRock, through its ESG assertions, has repeatedly made false and misleading statements to Mississippi investors. These misrepresentations pertain to BlackRock’s involvement in pushing ESG factors on portfolio companies.

"Investment companies will not push their political agenda on Mississippians, especially through fraudulent and deceptive means,” said Secretary Michael Watson. “All citizens should have the opportunity to make informed and educated decisions when investing their hard-earned money. If not, our office will hold these bad actors accountable."

For funds marketed as non-ESG, BlackRock claims these funds do not follow an ESG investment strategy. However, it is alleged that BlackRock has issued several statements and actions in commitment of using all assets under its management to incorporate ESG considerations, including advancing the environmental goals of net-zero carbon emissions.

The case also accuses BlackRock of informing clients they would see better long-term financial prospects and financial outcomes through ESG-backed funds, with little to no evidence to substantiate the claim.

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