BlackRock agreed to pay a $12 million penalty to settle claims that its adviser business failed to disclose a conflict of interest tied to one of its energy-fund portfolio managers, the Securities and Exchange Commission said.

The agency said Daniel Rice III was managing energy-focused funds and separately managed accounts at BlackRock when he founded and became the principal investor in Rice Energy, an oil-and-natural gas company, in 2005. Rice Energy later formed a joint venture with publicly traded coal company Alpha Natural Resources. The venture eventually became the largest holding in the $1.7 billion BlackRock Energy & Resources Portfolio, which Rice managed.