BlackRock’s Bolton Faces Italy Proceeding Over Saipem Trade

BlackRock Inc., the world’s largest asset manager, said an Italian securities regulator started a civil proceeding against one of its money managers, alleging he used non-public information to avoid 114.5 million euros ($156.5 million) in losses for clients last year.

Commissione Nazionale per le Societa e la Borsa, or Consob, alleges that Nigel Bolton, a portfolio manager and head of BlackRock Investment Management Limited’s European Equity Team, sold shares of oil and gas company Saipem SpA before it announced negative news, BlackRock said today in a regulatory filing. The sale of the shares occurred between Jan. 25 and Jan. 29, 2013. Saipem declined 34 percent on Jan. 30, 2013.

“Our portfolio manager made the decision to sell Saipem shares based on a growing wave of negative publicly available information that was widely disseminated in the marketplace,” Brian Beades, a spokesman for the New York-based firm, said in a statement. “Insider trading is abhorrent to BlackRock’s values, and we would never tolerate it.”

While BlackRock isn’t charged in the proceeding, it may be liable for the actions of its employee, according to the filing. The investigation is ongoing and under Italian law, the potential penalty can be greater than the loss avoided, BlackRock said in the filing.

BlackRock’s European Equity Team has about $40 billion in assets, of which Bolton manages about $14 billion, according to the filing. BlackRock manages $4.1 trillion in assets worldwide.

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