Consob, the Italian securities regulator, claimed that Nigel Bolton,
a portfolio manager and head of BlackRock Investment Management (UK)
Ltd's European Equity Team, used non-public information when he sold
more than 2 percent, or about 10.7 million, of Saipem's stock last
"While BlackRock is not charged in the proceeding, it may be liable
for the actions of its employee," the world's biggest money manager
said in a regulatory filing late Friday, adding that it does not
believe that Bolton will be found liable.
The sales that BlackRock said took place between January 25 and 29,
preceded Saipem's announcement on the 29th that it was cutting its
2012 outlook. That move sparked a more than 30 percent slump in the
Italian company's shares.
The regulator claimed the sale avoided over 114.5 million euros
($156.54 million) in BlackRock client losses.
Following an internal investigation, BlackRock said it believes the
sale was made based on widely disseminated, public information,
including a third-party analyst research report reducing Saipem's
"Insider trading is abhorrent to BlackRock's values, and we would
never tolerate it," the investment firm said in an emailed statement
in response to an earlier Reuters report that the regulator had
launched a probe.
BlackRock in its filing said Consob also alleged that the firm
declined to provide it with information and was an obstacle to the
The fund manager said it believes it has fully cooperated with
Consob, and that it will continue to do so.
[to top of second column]
Consob opened an initial probe into the profit warning and
subsequent share sales last February.
Consob declined to comment on Friday. Saipem, which is 43 percent
owned by Italian oil major Eni, also declined to comment.
Saipem, which cut its outlook for a second time in June, is
embroiled in a corruption probe over allegations it paid bribes to
win contracts in Algeria. Saipem has denied any wrongdoing.
News of that probe, which emerged in December 2012, led to the
ousting of Saipem's long-standing chief executive Pietro Franco Tali
and his replacement by Umberto Vergine.
The corruption allegations, along with concerns that a new
management team could uncover more bad news, prompted several funds
to sell their shares in the oil services company at the end of 2012.
BlackRock shares closed at $314.94 on Friday on the New York Stock
Exchange. ($1 = 0.7314 euros)
(Additional reporting by Avik Das in
Bangalore; editing by Erica Billingham and Anthony Kurian)
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