Mississippi issued a cease-and-desist order against BlackRock Inc. and its subsidiaries on Tuesday alleging widespread fraud in the marketing of the firm’s investment funds that do not carry an ESG label. The order does not contain a specific monetary penalty but indicates it could result in a “multimillion-dollar penalty” at a later point for violations of the Mississippi Securities Act.

The 33-page order, signed by Mississippi Secretary of State Michael Watson, alleges that BlackRock fraudulently marketed some of its mutual funds and exchange-traded funds as “non-ESG,” even though the investment manager still carries on an engagement and investment strategy informed by ESG considerations. Further, BlackRock markets its ESG products as outperforming non-ESG comparators without evidence, the order contends.

The order tells BlackRock to ‘immediately cease and desist from offering securities in or from Mississippi through an offer containing a statement that is materially misleading or otherwise likely to deceive the public.”

It is not clear how many securities the firm has sold in the state.

In addition, the order offers BlackRock the opportunity to request an administrative hearing on the allegations withing 30 days from receipt of the order.

BlackRock did not respond to a request for comment.

Each violation carries a maximum fine of $25,000, there are “thousands of potential violations,” according to the order, and the order pledges that the secretary’s office “will continue to investigate before issuing a final order to impose an administrative penalty.”

The first claim of fraud is essentially that all of BlackRock’s fund offerings are ESG funds, including those that explicitly say they are not. The order notes that BlackRock is a member of the Net Zero Asset Managers Initiative and has pledged to pursue a proxy voting policy oriented toward lowering carbon emissions. The order states, “BlackRock has committed to engagement that is based on a sustainable, impact or ESG investment strategy—directly contrary to what it represents to investors.”

The state’s order lists index funds offered by BlackRock that are marketed as being non-ESG because they simply track an index. The order argues this is fraud because BlackRock has committed to managing all its assets towards net zero, contradicting the marketing materials for its index funds; and because BlackRock still votes its shares on those indexes in a manner informed by ESG considerations.

“In particular, BlackRock has repeatedly exercised its voting authority—over the opposition of company management—to support proposals pressuring companies to align their political lobbying with the public-policy goals of the Paris Agreement,” it states. “BlackRock has exercised proxy-voting authority to get companies to adopt specific emissions-reduction targets.”

The second allegation notes that BlackRock fraudulently asserts that ESG considerations are “financially beneficial to its ESG funds,” while saying elsewhere that ESG considerations “do not provide an indication of current of future fund performance.”

In places where BlackRock’s descriptions of its ESG strategy do not contradict each other, the claim that ESG funds outperform others is based on weak empirical evidence, according to the order.

The order was issued as the Mississippi legislature is considering a bill that would move control of the state’s pension system board from members mostly elected by plan members to one mostly appointed by state government officials.

The Public Employees’ Retirement System of Mississippi opposes the measure.