NEW YORK, N.Y. – Asset manager BlackRock agreed to end a stock analyst survey program under an agreement that New York’s top prosecutor on Thursday said was the result of a financial industry investigation into how the release of some Wall Street analyst information gives some investors an unfair advantage.
New York State Attorney General Eric Schneiderman said BlackRock’s surveys would ask analysts about companies they followed and were frequently timed before the official release of publicly available opinions.
Under the program, BlackRock would combine survey responses with the publicly available analyst opinions to make investment decisions, Schneiderman said.
“To their credit, they recognized this was a problematic area and agreed to stop completely,” Schneiderman said.
BlackRock didn’t confirm or deny any of the attorney general’s findings in making the agreement with Schneiderman’s office. The company also agreed to pay $400,000 to cover the costs of the investigation and Schneiderman said BlackRock would be co-operating in the office’s continuing investigation.
A call to BlackRock seeking comment was not immediately returned.
Schneiderman has made a cause of taking on what he has called “Insider Trading 2.0” — the release of extra or early information to some market players. Modern stock trading is dominated by automated computer systems that make trades in fractions of a second, and traders can profit from receiving data even milliseconds before its public release.
In July, Schneiderman reached an agreement with Thomson Reuters in which the news and business information provider agreed to stop distributing results of consumer surveys a couple of seconds early to clients who paid for advanced access.