Attorney General Raúl Labrador has joined a coalition of 17 attorneys general to seek answers from major asset managers regarding their disclosures about Chinese investments. The coalition sent a letter to BlackRock, StateStreet, Invesco, JPMorgan, Goldman Sachs, and Morgan Stanley on Thursday. They expressed concerns that these firms might be misrepresenting and concealing the risks associated with investing in China.
China is considered a foreign adversary by the United States. The letter suggests that asset managers imply investing in China carries similar risks as other countries, which may not be accurate. Such misstatements could violate fiduciary duties and state laws related to securities and deceptive practices.
Attorney General Labrador stated, "Ignoring facts and misrepresenting risks to investors because of pressure or deception of a foreign adversary is completely unacceptable." He emphasized the legal responsibility of asset managers to protect client investments, including pension funds and retirement accounts for millions of Americans.
The coalition believes these potential misstatements could result from conflicts of interest due to pressure from China or an inability to accurately investigate facts due to interference from the Chinese Communist Party (CCP). They have asked for responses from the asset managers by March 10.
Concerns were also raised about BlackRock's failure to disclose China's intentions towards Taiwan and reliance on potentially illegal investments under CCP regulations. Additionally, BlackRock's characterization of issues such as Uyghur forced labor was criticized.
The coalition highlighted discrepancies in BlackRock's environmental assessments between its Chinese funds and U.S. funds despite China's higher CO2 emissions and human rights issues. This involvement with Chinese investments may conflict with their duty of loyalty to clients.
Attorneys general from several states, including Alabama, Indiana, Iowa, Kansas, Mississippi, Missouri, North Dakota, Oklahoma, Ohio, South Carolina, South Dakota, Texas, Virginia, West Virginia, Wyoming joined Montana Attorney General Austin Knudsen in leading this initiative.