A pair of U.S. pension funds have sued BlackRock (NYSE: BLK), alleging the company’s iShares ETF business improperly kept revenue from securities lending, according to media reports.

The suit also alleges the firm breached its fiduciary duties.

“The pension plans seek to recover funds rightfully owed to them as iShares shareholders, which were improperly spent by iShares’ management on grossly excessive compensation to securities lending agents affiliated with iShares and certain of their affiliates,” according to the compliant, Ignites.com reports.

BlackRock, iShares and nine directors “systematically violated their fiduciary duties, setting up an excessive fee structure designed to loot securities lending returns properly due to iShares investors,” according to the suit filed by Cincinnati-based Laborers’ Local 265 Pension Fund and Plumbers and Pipefitters Local 572 Pension Fund of Nashville.

Some regulators have been taking a closer look at the way ETF providers generate extra cash on the side through securities lending.

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