Administration November 11, 2004

Official: Franklin Sales Abuses Settlement Near

November 11, 2004 (PLANSPONSOR.com) - Franklin Resources Inc. the largest publicly traded US money management firm, is apparently nearing a settlement with California officials over charges it improperly paid brokers to sell more of its funds.
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“We are very close to resolution,” California Attorney General Bill Lockyer said during a Thursday speech, according to a Reuters report. “I think it is next week.”

Lockyer said the San Mateo, California-based company, which manages the Franklin Templeton mutual funds, will likely pay the state roughly $18 million to settle charges (See  CA Attorney General Probing Fund Sales Misdeeds ). He also said the state and the Securities and Exchange Commission (SEC) may reveal the deal together, but that he didn’t know how much the firm would have to pay the SEC. .

Financial regulators have been investigating mutual fund companies for paying to get their funds sold more frequently, in addition to abusive trading practices such as late trading and market timing.

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