U.S. pension funds sue Blackrock, allege 'looting' at iShares
February 4, 2013 7:00 AM EST
Two U.S. pension funds have alleged in a lawsuit that Blackrock
In the suit, the pension funds allege that several iShares ETFs spent funds on "grossly excessive compensation" to agents affiliated with the ETFs, as well as on other agents, and they want to recovery the funds for investors.
Blackrock's iShares ETFs have "systematically violated their fiduciary duties, setting up an excessive fee structure designed to loot securities lending returns properly due to iShares investors," they say in the suit, filed on January 18 in the Middle District Court of Tennessee.
The Laborers' Local 265 Pension Fund of Cincinnati and the Plumbers and Pipefitters Local No. 572 Pension Fund of Nashville further allege that Blackrock officials and the iShares ETFs ran a scheme to take at least 40 percent of securities lending revenues - which they called "entirely disproportionate" - for themselves at the expense of investors.
Blackrock President Robert Kapito and iShares Chairman Michael Latham are named as defendants in the suit.
Representatives of Blackrock, the largest manager of ETFs, did not immediately respond to a request to comment on the suit.
The recently-acquired iShares unit has been a stellar performer for the New York-based asset manager, bringing in $36 billion of new business for Blackrock in the fourth quarter.
(Reporting by Jonathan Spicer; Editing by Marguerita Choy)
Most Popular Slideshows
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Nokia Lumia 730 v. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- NATO: Russia's Been Conducting Too Many Military Flights Over Europe
- Apple iPhone 6 Plus vs Motorola Droid Turbo: Comparsion On Processor, Software And Battery
- Australia Special Forces Await 'Delayed' Iraqi Visas Before Joining ISIS Fight
- ISIS Has Been Equipped With Advanced Anti-Aircraft Missiles
- Samsung Galaxy Note 4 vs Motorola Droid Turbo – S-Pen Is Note’s 4 USP But Droid Turbo Can Outshine With Larger Battery
- 8 Important Things to Consider Before Buying or Upgrading to iPad Air 2