Under the settlement, Franklin will pay $50 million, including disgorgement of $30 million and a civil penalty of $20 million. These amounts will be distributed to shareholders of mutual funds affected by the market timing, the SEC said in a statement on its Web site.
The SEC said Franklin also agreed to new compliance measures designed to protect against future violations. These measures include establishing an enhanced compliance oversight and reporting structure and undergoing biannual compliance reviews conducted by an independent third-party.
The settlement was the latest in a series between major mutual fund groups and the SEC centered on market timing or late trading violations. Franklin is the adviser for many funds in the Franklin Templeton Investments group, the fourth largest US mutual fund complex, the SEC said.