NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced an agreement on Thursday with BlackRock, the world's largest asset manager, to resolve allegations it gave some market players an unfair advantage.
BlackRock allegedly engaged in the early release of Wall Street analyst sentiment, a practice that could provide an unfair advantage to technologically sophisticated and elite market players at the expense of others in the market. Under the terms of the agreement, BlackRock agreed to end the practice worldwide. BlackRock will also cooperate with Schneiderman's broader inquiry into a practice he refers to as Insider Trading 2.0.
"Our agreement with BlackRock to end its global analyst survey program and cooperate with my office's Wall Street-wide investigation into the early release of analyst sentiment is a major step forward in ensuring fairness to our financial markets and ensuring a level playing field for all investors," Schneiderman said.
"The concept that there should be one set of rules for everyone is critical to protecting the integrity of our markets, which is why my office will continue to take action against those who provide unfair advantages to elite traders at the expense of the rest of us."
BlackRock allegedly used an analyst survey program to solicit answers from analysts that could reveal the direction of their next public report. Analyst reports can include market moving information because the recommendations can impact clients' decisions and the market's direction. Schneiderman alleged the surveys could be used to get ahead of future analyst revisions.
The agreement comes after a separate reform secured by Schneiderman's office in which Thomson Reuters agreed to discontinue its sale of an early release of consumer survey data to traders considered to be high frequency.