Post by jannikki on Aug 23, 2006 20:05:43 GMT -4
SEC clears $20 mln payment to Franklin funds
Tue Aug 22, 2006 4:53pm ET
NEW YORK, Aug 22 (Reuters) - The U.S. Securities and Exchange Commission late on Monday cleared the distribution of more than $20 million in civil penalties to funds managed by Franklin Resources (BEN.N: Quote, Profile, Research) as part of a 2004 settlement over "market timing" allegations.
The SEC disclosed in two years ago that Franklin Resources, which manages the Franklin Templeton fund family, had settled regulatory allegations that it allowed certain investors to rapidly trade in and out of some mutual funds as part of a wide-ranging industry probe.
Franklin Advisors, its investment manager, agreed to pay $50 million without admitting or denying the charges, including disgorgement of $30 million and a civil penalty of $20 million, the SEC said on Aug. 2, 2004.
Market timing involves a fund manager allowing favored investors to buy or sell mutual fund units after the market closes to take advantage of changes in the net asset value of the fund's holdings, which is barred under fund management contracts.
The amount to be distributed to the Franklin Templeton mutual funds is based on brokerage commissions that would have been paid to the funds from 2001 to 2003, the SEC said. The total amount to be distributed, including interest, is $20,701,897, the SEC said.
In January, Daniel Calugar, the former owner of Securities Brokerage Inc., was convicted of engaging in market timing trades that cheated investors in one Franklin mutual fund, New York State Attorney General Eliot Spitzer announced.
Calugar in August 2001 entered into a secret agreement with an employee of the investment advisor for the Franklin Small-Mid Cap Growth Fund that let him rapidly trade in and out of the fund without paying the mandated 2 percent penalty fee, said Spitzer. The actions deprived the fund of more than $1 million in fees, the AG said.
It could not immediately be learned how many funds were to be beneficiaries of the distribution ordered by the SEC.
© Reuters 2006. All Rights Reserved.
yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060822:MTFH23398_2006-08-22_20-53-54_N22261469&type=comktNews&rpc=44
Tue Aug 22, 2006 4:53pm ET
NEW YORK, Aug 22 (Reuters) - The U.S. Securities and Exchange Commission late on Monday cleared the distribution of more than $20 million in civil penalties to funds managed by Franklin Resources (BEN.N: Quote, Profile, Research) as part of a 2004 settlement over "market timing" allegations.
The SEC disclosed in two years ago that Franklin Resources, which manages the Franklin Templeton fund family, had settled regulatory allegations that it allowed certain investors to rapidly trade in and out of some mutual funds as part of a wide-ranging industry probe.
Franklin Advisors, its investment manager, agreed to pay $50 million without admitting or denying the charges, including disgorgement of $30 million and a civil penalty of $20 million, the SEC said on Aug. 2, 2004.
Market timing involves a fund manager allowing favored investors to buy or sell mutual fund units after the market closes to take advantage of changes in the net asset value of the fund's holdings, which is barred under fund management contracts.
The amount to be distributed to the Franklin Templeton mutual funds is based on brokerage commissions that would have been paid to the funds from 2001 to 2003, the SEC said. The total amount to be distributed, including interest, is $20,701,897, the SEC said.
In January, Daniel Calugar, the former owner of Securities Brokerage Inc., was convicted of engaging in market timing trades that cheated investors in one Franklin mutual fund, New York State Attorney General Eliot Spitzer announced.
Calugar in August 2001 entered into a secret agreement with an employee of the investment advisor for the Franklin Small-Mid Cap Growth Fund that let him rapidly trade in and out of the fund without paying the mandated 2 percent penalty fee, said Spitzer. The actions deprived the fund of more than $1 million in fees, the AG said.
It could not immediately be learned how many funds were to be beneficiaries of the distribution ordered by the SEC.
© Reuters 2006. All Rights Reserved.
yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060822:MTFH23398_2006-08-22_20-53-54_N22261469&type=comktNews&rpc=44