Pending Securities Fraud Investigation into Franklin Resources, Inc.

In July 2024, Franklin Resources announced an internal investigation regarding past trade allocations of treasury derivatives, which coincided with notifications of parallel investigations by regulatory authorities. The situation escalated when Ken Leech, co-Chief Investment Officer of Western Asset Management, was placed on leave after receiving a Wells Notice from the SEC. This probe is reportedly examining whether Leech engaged in “cherry-picking,” a practice where favorable trades are allocated selectively, which could have serious implications for the firm. Following these revelations, Franklin Resources experienced a sharp decline in its stock price, with a notable drop of 12.5% on August 21, 2024, reflecting investor concerns over the ongoing investigations and potential legal repercussions.

Key Developments

• Internal Investigation: Franklin Resources initiated an internal review of trade allocations, which led to external investigations by the SEC and DOJ.
• Leadership Changes: Ken Leech was placed on leave amid allegations of misconduct, prompting the company to close its Macro Opportunities strategy, impacting approximately $2 billion in assets under management.
• Stock Price Impact: The investigations and related news have resulted in significant declines in Franklin Resources’ stock, raising concerns among investors.

What Affected Investors Can Do

Investors who believe they have suffered losses as a result of these developments are encouraged to seek legal counsel. The law firm Bleichmar Fonti & Auld LLP is actively investigating these issues and offers potential representation on a contingency fee basis, meaning there are no upfront costs for shareholders. For more information, investors can visit BFA Law’s website.