British regulators have fined BlackRock £9.5 million (US$15.2 million) for failing to adequately protect client assets in the wake of its acquisition of Merrill Lynch Investment Managers six years ago.
The Financial Services Authority said that BlackRock had failed to heed British laws requiring it to obtain letters from third parties assuring that client money is both identifiable and protected in the event of a bankruptcy. No BlackRock clients lost any money in the matter.
BlackRock apologized for its oversight.
“This is not the first time we have seen the impact on client money overlooked as part of a reorganization,” the FSA's Tracey McDermott said. “The fine imposed today should remind all firms of the critical importance we place on ensuring proper protection of client money at all times.”