Montgomery, AL – Attorney General Steve Marshall has joined a coalition of 17 attorneys general in questioning major asset management firms about their transparency regarding investments in China. The coalition sent a letter on Thursday to BlackRock, State Street, Invesco, JPMorgan, Goldman Sachs, and Morgan Stanley, raising concerns that these firms may be misrepresenting and omitting crucial information about the risks of investing in China.
The attorneys general argue that some asset managers imply investing in China carries risks similar to other markets, despite China’s designation as a foreign adversary by the U.S. government. They suggest that this could violate fiduciary responsibilities, particularly the duty of care, which requires asset managers to thoroughly assess investment risks and disclose them accurately to investors. The letter also references potential conflicts with state securities laws and regulations governing unfair and deceptive business practices.
“Asset managers have a duty to be transparent with their investors, not to obscure the significant risks posed by investments in a foreign adversary,” said Attorney General Marshall. “The Chinese Communist Party’s market interference, human rights abuses, and geopolitical threats are not just abstract concerns—they directly impact the financial security of American investors.”
The coalition contends that BlackRock and other firms have not fully disclosed risks such as China’s potential military actions regarding Taiwan and the possibility that investments could be deemed illegal under Chinese government policies. They also raise concerns over how some asset managers have characterized human rights issues, such as China’s treatment of Uyghurs, and their approach to environmental, social, and governance (ESG) considerations.
The attorneys general suggest that firms may be downplaying China’s market manipulation and regulatory unpredictability. They argue that BlackRock, for example, increased its promotion of Chinese investments after receiving approval to expand operations there, despite China’s adversarial designation by the U.S. government. The letter questions whether such decisions align with the firms’ duty of loyalty to their clients.
The coalition, led by Montana Attorney General Austin Knudsen, is requesting detailed responses from the asset managers by March 10 as part of a broader effort to assess compliance with fiduciary and legal obligations. The attorneys general joining the letter represent Idaho, Indiana, Iowa, Kansas, Mississippi, Missouri, North Dakota, Oklahoma, Ohio, South Carolina, South Dakota, Texas, Virginia, West Virginia, and Wyoming.
