Investing.com -- Franklin Resources (NYSE:BEN) shares climbed 6% Thursday after Bloomberg reported that the company’s Western Asset Management Co. unit is nearing a settlement with the Securities and Exchange Commission over trading practices.
The settlement, which may be announced in the coming days, could see Western Asset Management pay at least $100 million to resolve the case, according to people with knowledge of the matter cited by Bloomberg. The probe relates to trade allocations at the asset management firm.
A $100 million penalty would mark the largest sought by the SEC during President Donald Trump’s second term, according to the report.
The settlement stems from an investigation into trading practices of Ken Leech, Western Asset Management’s former portfolio manager. Leech faces separate criminal charges from the Department of Justice, including securities fraud for allegedly cherry-picking lucrative trades for favored clients. He has pleaded not guilty to the charges.
The potential agreement represents Franklin Resources’ continued efforts to resolve matters related to Leech’s tenure at its Western Asset Management subsidiary.
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