BlackRock, the world's largest asset manager, has agreed to end its analyst survey programme after a probe by the US Attorney General into the early release of market moving sentiment data.
The Attorney General's Office determined that the design, timing, and structure of the surveys allowed BlackRock to obtain information from analysts that could be used to get ahead of, or, as a BlackRock document put it, "front-run" future analyst revisions.
A key component of the settlement with BlackRock is its continued cooperation in the Attorney General's broader investigation into the early release of analyst opinions to investors who use the data in complex trading programs.
It follows a separate reform secured by the Attorney General in which Thomson Reuters agreed to stop selling an early release of consumer survey data to high-frequency traders.
"Our agreement with BlackRock to end its global analyst survey programme and cooperate with my office's Wall Street-wide investigation into the early release of analyst sentiment is a major step forward in ensuring fairness to our financial markets and ensuring a level playing field for all investors," says Attorney General Schneiderman. "The concept that there should be one set of rules for everyone is critical to protecting the integrity of our markets, which is why my office will continue to take action against those who provide unfair advantages to elite traders at the expense of the rest of us."
The investigation was based in part on information provided by confidential whistleblowers who came forward to express grave concerns about the practice.
BlackRock agreed to pay $400,000 for the cost of the investigation, but no fine or penalty, and to cooperate in any investigation related to the probe.