Attorney General Miyares Demands Answers from BlackRock-linked Mutual Fund Directors Regarding Conflicts of Interest, ESG Investments

RICHMOND, Va. – Attorney General Jason Miyares joined a 15-state coalition demanding answers from Blackrock-linked mutual fund directors regarding potential conflicts of interest between the mutual funds they are managing and questioning whether BlackRock should continue acting as an investment advisory to the mutual funds. The attorneys general also raised concerns over BlackRock’s embrace of Environmental, Social, and Governance (ESG) investing practices.

The letter raises several concerns including financial relationships that could undermine director independence and over-boarding; whether there has been sufficient disclosure, oversight, and investigation into potential conflicts of interest by BlackRock as investment adviser to the mutual funds; and the actions of the directors related to BlackRock’s public commitments to use client assets to advance ESG goals rather than maximize shareholder value.

The attorneys general explain in the letter that six of the nine Mutual Fund directors have a relationship with BlackRock as either a BlackRock employee or a board member of a company where BlackRock owns more than 5%. Such financial entanglement between the Mutual Fund directors and BlackRock undermines the principles undergirding the Investment Company Act of 1940 and State principles of independence.

“The overlapping web of personal and business relationships between major mutual fund directors and BlackRock raise red flags about potential conflicts of interest, and call even further into question the misguided investment strategies done in the name of ESG," said Attorney General Miyares. 

BlackRock’s ESG commitments pushing the political goals of progressive programs like Climate Action 100+ and the Net Zero Asset Managers raise serious concerns over its duty to act exclusively for the financial benefit of its shareholders and may have cost mutual funds returns.

Virginia joined Alabama, Arkansas, Georgia, Iowa, Indiana, Kansas, Louisiana, Missouri, Mississippi, New Hampshire, South Carolina, South Dakota, and Utah in signing the Montana-led letter.

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