BlackRock Institutional Trust and RA Capital Management were among 19 firms and an individual trader that settled with the SEC over charges they illegally participated in stock offerings less than five days after short selling the stock.
Those cited by the Securities and Exchange Commission will pay a combined $9 million in disgorgement, interest and penalties.
BlackRock Institutional Trust agreed to pay disgorgement of $1.12 million along with $22,471 in interest and a $530,000 penalty, according to an SEC order filed Tuesday.
In a separate SEC filing, RA Capital Management, a private equity firm focusing on life-sciences industries, agreed to pay the largest total, with disgorgement of $2.65 million, interest of $73,000 and a $905,000 penalty.
The SEC charged BlackRock Institutional Trust with buying offering shares during the restricted period three times from April 2010 to March 2011, while RA Capital was charged with committing the same offense 17 times from June 2009 through July 2013.
“BlackRock's settlement with the SEC related to three inadvertent violations of Rule 105 that occurred in 2010 and 2011,” said a statement from Brian Beades, BlackRock spokesman. “There was no allegation that BlackRock intentionally violated the rule. Client accounts will not be affected, and the company has further enhanced its compliance policies and procedures since 2011, which we believe will significantly reduce any risk of reoccurrence.”
Amanda Daniels, RA Capital spokeswoman, could not be reached for comment.