A federal court judge in Tennessee on Wednesday dismissed a lawsuit filed by two union pension funds over excessive fees they claimed BlackRock charged for securities lending linked to the money manager’s iShares unit.
U.S. District Judge Aleta Trauger in Nashville ruled the pension funds could not sue BlackRock under securities lending law, according to court documents.
The $156 million Laborers Local 265 Pension Fund, Cincinnati, and the $125 million Plumbers and Pipefitters Local No. 572 Pension Fund, Nashville, had claimed that the 40% compensation provided for BlackRock’s securities-lending services was “excessive compared to peer mutual funds and, in particular, compared to funds which employ unaffiliated lending agents,” according to court documents.
BlackRock serves as its own securities-lending agent. The two pension funds invested in iShares ETFs.
Ms. Trauger gave plaintiffs a deadline of Sept. 17 to file an amended complaint.
Neither Christine Hudacko, BlackRock spokeswoman, nor Richard Koeneke, spokesman for Robbins Arroyo, the plaintiffs’ legal counsel, could be reached for comment.