Mississippi Secretary of State Michael Watson issued a cease and desist order on Tuesday against asset management company BlackRock, claiming that the firm "repeatedly made false and misleading statements" concerning its environmental, social, and governance agenda, Fox Business reported.

Watson, along with the Securities Division of the Secretary of State's Office, issued the order "to stop BlackRock's alleged fraudulent actions and impose a multimillion-dollar administrative penalty," according to a Wednesday press release.

Watson accused BlackRock of deceiving Mississippi investors regarding the firm's "involvement in pushing ESG factors on portfolio companies."

The order stated that BlackRock claims its non-ESG "funds do not follow an ESG investment strategy." Watson argued that this is untrue.

"BlackRock has issued several statements and actions in commitment of using all assets under its management to incorporate ESG considerations, including advancing the environmental goals of net zero carbon emissions," the Secretary of State's press release read. "BlackRock also informed clients they would see better long-term financial prospects and financial outcomes through ESG-backed funds, with little to no evidence to substantiate the claim."

As an example, the order pointed to BlackRock's commitments to the Net Zero Asset Managers initiative.

"BlackRock's climate-disclosure reports demonstrate that BlackRock is actively working to fulfill its NZAM obligations by implementing a 'sustainable' net-zero investment strategy across 'all assets under management,'" it explained.

The cease and desist order stated that BlackRock also misled Mississippi ESG investors by marketing the funds as financially beneficial. Additionally, it claimed the firm charged higher fees for ESG funds than for non-ESG funds.

In a statement to Fox Business, Watson said, "Investment companies will not push their political agenda on Mississippians, especially through fraudulent and deceptive means."

"All citizens should have the opportunity to make informed and educated decisions when investing their hard-earned money. If not, our office will hold these bad actors accountable," he added.

BlackRock told Fox Business it is committed to following the law in "every respect."

"Many policymakers and government officials have ideas on how we should invest our clients' assets," BlackRock said. "We are always bound to invest consistent with our clients' choices, their best financial interests, and applicable law. Our only agenda is maximizing risk-adjusted returns for the funds our clients choose to invest in. We operate in one of the most highly regulated industries in the country and are committed to following the law in every respect."

Last week, Texas pulled an $8.5 billion investment managed by BlackRock. Texas State Board of Education Chairman Aaron Kinsey explained that the decision was based on the asset management company's "destructive" commitment to ESG. He accused the firm of violating the state's Senate Bill 13, which prohibits "investments in companies that boycott certain energy companies."

BlackRock fired back, calling Texas' decision to pull its investment "reckless" and "irresponsible." The company's vice chairman, Mark McCombe, said the state prioritized "short-term politics over your long-term fiduciary responsibilities."

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