COMPLIANCE NEWSFLASHES
Franklin Advisers Settles Market-Timing Charges With SEC
Franklin Advisers, a California-based investment adviser firm in the fourth largest mutual fund complex in the U.S., has agreed to undergo compliance reforms and pay the SEC $50 million -- a disgorgement of $30 million and a civil penalty of $20 million -- to settle market-timing charges in mutual funds it managed. The amount will be distributed to shareholders affected by the charge.
"Franklin allowed known market timers to trade in and out of its funds in a manner contrary to the guidelines of the fund prospectuses," said Helane Morrison, district administrator of the SEC's San Francisco District Office, in the release.
The commission's order found that the firm violated Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and Section 34(b) of the Investment Company Act of 1940. Franklin consented to the entry of the order but neglected to admit or deny the findings.
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