BlackRock gold fund resumed issuing shares too soon, faces penalties
By Trevor Hunnicutt
Monday, March 7, 2016
NEW YORK -- BlackRock issued 25 million shares of the iShares Gold Trust (IAU) before they were officially registered with securities regulators, and the fund "may become subject to penalties" by securities regulators, the fund manager said in a regulatory filing today.
The fund company resumed issuing new shares of the physically backed gold exchange-traded product after suspending new issuance on Friday, citing heavy demand for the product.
But, in its filing, BlackRock said it may have to sell gold in the fund to buy back the shares that were inadvertently not registered and pay interest to investors who purchased the shares. Those investors "may have the right to collect damages" from the fund, the filing said.
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