BlackRock has backed its head of European equities Nigel Bolton who faces legal proceedings amid allegations of insider trading from an Italian regulator.
Italy’s Commissione Nazionale per le Societa e la Borsa, also known as Consob, claims Bolton had non-public information when selling €315m (£261.1m) of shares in oil and gas contractor Saipem last January.
The sale of the shares took place between 25 and 29 January last year, ahead of Saipem cutingt its 2013 outlook on 29 January, resulting in a 30 per cent drop in the company’s shares.
Consob alleges Bolton, who co-manages the €5.2bn BGF European fund and the €2bn BGF European Focus fund, used insider knowledge to make this sale.
A BlackRock statement says: “Our portfolio manager made the decision to sell Saipem shares based on a growing wave of negative publicly available information that was widely disseminated in the marketplace.
“The mere fact that shares were sold shortly before a profit warning is not evidence of insider trading, particularly when the information on which the trade was made was widely available in the marketplace. BlackRock conducted a thorough investigation and found there is no evidence to support the allegations.”
BlackRock will fully co-operate with Consob and insists no clients or funds will be affected.
The JHC Partnership director Keith Iles says: “You would expect BlackRock’s equities research team to be looking at the market. But there can be a fine line between what is fantastic research and what is insider trading. If it is all kosher, then Bolton has made a really good call.”