‘This is not a place where we should be investing U.S. dollars, and especially U.S. pension dollars,’ Montana’s attorney general said.
Attorneys general from 17 states issued a warning letter to BlackRock and other fund managers, alleging that they failed to fully disclose the risks for clients investing in Chinese companies.
The letter, dated Feb. 6, was issued to BlackRock, State Street, Invesco, Morgan Stanley, JPMorgan and Goldman Sachs.
The attorneys general stated that they were “particularly concerned about BlackRock’s material misstatements and omissions, as BlackRock is the largest issuer of emerging market ETFs and China ETFs.” Specifically, the attorneys general wrote that “China is a statutorily designated foreign adversary of the U.S. and has threatened to invade Taiwan,” yet BlackRock has implied that investments in China were at the same risk level as those in other countries.
“China is an overt stated enemy of the United States, and that’s not from our government, that’s from their government, their internal military documents,” Montana Attorney General Austin Knudsen, who led the effort, told The Epoch Times.
“This is a country that does not have our best interests at heart, that’s been engaged in asymmetric warfare against the U.S. for decades, that’s been engaged in massive intellectual property theft against our country, and espionage,” he said. “This is not a place where we should be investing U.S. dollars, and especially U.S. pension dollars.”
In their letter, the attorneys general also alleged that “BlackRock euphemistically refers to Uyghur forced labor and genocide as ‘religious and nationalist disputes,’ and gives its China fund the same ESG [environmental, social and governance] letter grade as for its U.S. small-cap stocks fund, despite China’s dismal performance on ESG.” The other asset managers who received the letter “similarly misrepresent or conceal the material risks of Chinese investments,” the attorneys general wrote.
BlackRock disputed the allegations, posting on X on Feb. 7 that the attorneys general were “wrong in at least three significant claims about our China disclosures, all of which are publicly available.” The asset manager noted its statements that “China has a complex territorial dispute regarding the sovereignty of Taiwan and has made threats of invasion”; that investing in China risks, among other things, “expropriation, nationalization, confiscation of assets and property”; and that accounting and auditing practices in China “may be less reliable.”
