Blackrock could face penalties and compensation costs after "inadvertent" sale of unregistered shares

William Turvill
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Blackrock issued and sold $296m of shares without registering them with the US Securities and Exchange Commission (Source: Getty)

Blackrock Inc could face penalties and other costs in the United States after it sold more shares than it was authorised to in its iShares Gold Trust.

Between 19 February and 3 March, the company issued and sold $296m of shares without properly registering them with the US Securities and Exchange Commission.

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The company described the problem as “inadvertent” and suspending issuance last week when it learnt of the situation , Reuters reported.

It said it would now be resuming issuing shares in the $7.8bn fund after registering more with the SEC.

Blackrock said in a filing to the SEC that it may be required to re-acquire the shares and that investors who bought and resold the unregistered shares may have a right to collect damages and interest from the fund.

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The company may also have to pay the SEC and state penalties.

Blackrock has not disclosed how much compensation it could be set to pay and the SEC has declined to comment on the story.

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