Attorney General Gentner Drummond has raised concerns about the practices of major asset managers, including BlackRock, StateStreet, Invesco, JPMorgan, Goldman Sachs, and Morgan Stanley. Along with 16 other attorneys general, Drummond sent a letter to these firms questioning their disclosures related to Chinese investments.
The coalition alleges that these asset managers may be misrepresenting and omitting important information regarding the risks of investing in China. This issue arises from China's designation as a foreign adversary by the United States. The letter suggests that these firms might be implying that investing in China carries similar risks to other countries.
The potential misstatements could violate asset managers' fiduciary duties to thoroughly investigate investment facts and might contravene state securities laws and regulations on unfair practices. "It is deeply troubling that BlackRock and similar asset managers are concealing information from their investors about Chinese market risks," stated Drummond. He emphasized his intention to hold these firms accountable.
Specific concerns include BlackRock's failure to disclose China's intentions towards Taiwan and its description of the Uyghur situation as "religious and nationalist disputes." Additionally, there are accusations of inadequate disclosure about the quality of Chinese audits compared to U.S. standards.
Drummond questions whether the asset managers' actions reflect conflicts of interest due to pressure from China or an inability to properly assess facts because of interference by the Chinese Communist Party (CCP). The letter also highlights that BlackRock's promotion of Chinese investments followed CCP approval despite prior U.S. designations of China as an adversary.
Drummond and his colleagues demand responses from the involved asset managers by March 10 as part of ongoing investigations into these matters. Attorneys general from Alabama, Idaho, Indiana, Iowa, Kansas, Mississippi, Missouri, Montana, North Dakota, Ohio, South Carolina, South Dakota, Texas, Virginia, West Virginia and Wyoming have also endorsed this initiative.