BlackRock sued for alleged overcharging of mutual fund investors

Investors filed a lawsuit in New York state court accusing BlackRock of using improper accounting that mis‑classified dividend income and realized capital gains as fund assets. The practice allegedly inflated the net asset values of more than 70 equity mutual funds, causing investors to purchase fewer shares and to pay higher management fees and tax bills.

The complaint claims the inflated NAVs violate the Securities Act of 1933. It quotes the plaintiffs: “The ‘Buying a Dividend’ disclosure conceals the far broader and more damaging reality: that the NAV of the respective BlackRock Funds are artificially inflated by accrued income and gains every day.”

BlackRock, which ended March with $13.89 trillion in assets under management—including $7.66 trillion in equities—has not responded to comment requests. The suit seeks unspecified damages for investors in BlackRock’s actively managed and indexed equity mutual funds over the past three years.