Press Releases & Columns | Michael Watson Secretary of state (2024)

Wednesday, March 27, 2024

Mississippi Secretary of State Issues Order Against BlackRock for Alleged Securities Fraud Related to ESG Investment Strategy with Possible Multimillion-dollar Penalty

JACKSON, Miss. – On March 26, 2024, Mississippi Secretary of State Michael Watson and the Securities Division of the Secretary of State’s Office issued a Summary Cease and Desist Order and Notice of Intent to Impose Administrative Penalty against BlackRock, Inc., a multinational investment company and the world's largest asset manager.

The Securities Division is seeking to stop BlackRock’s alleged fraudulent actions and impose a multimillion-dollar administrative penalty.
BlackRock provides exchange-traded funds (ETFs), or pooled investments categorized as securities, and currently manages over nine trillion dollars in investments through 70 offices in 30 countries. BlackRock has recently asserted itself as a leader in the investment industry to promote environmental, social, and governance (ESG) factors on portfolio companies.

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, 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.

BlackRock also informed 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.