(Bloomberg) -- BlackRock, the world’s biggest money manager, agreed to pay $12 million to settle U.S. regulatory claims that it failed to disclose a conflict of interest of a top portfolio manager.

Daniel J. Rice III, a former money manager, invested client money in a BlackRock fund that invested in a company he founded, according to an SEC statement on April 20. New York-based BlackRock knew and approved Rice’s investment and failed to disclose the conflict, the regulator said. Rice left the company in 2012.

“BlackRock violated its fiduciary obligation to eliminate the conflict of interest created by Rice’s outside business activity,” Andrew Ceresney, director of the SEC’s enforcement division, said in a statement.

The company said in a statement that it has taken additional steps to enhance its policies and procedures regarding employees’ outside business activities.

“BlackRock has extensive policies and procedures in place to manage conflicts of interest,” the company said in a statement. “As a fiduciary for our clients, we take even the appearance of conflicts of interest extremely seriously.”

The SEC also sanctioned Bartholomew Battista, the former compliance chief. Battista agreed to pay $60,000 to settle claims related to his role in the funds’ failure to report the information. In resolving the claims, BlackRock also agreed to hire a compliance consultant and conduct an internal review.

A phone call to Jonathan Polkes, an attorney for Battista at law firm Weil Gotshal & Manges, wasn’t immediately returned.

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