Franklin Resources Inc. announced Monday that it had agreed to a $20 million penalty in a settlement with the Securities and Exchange Commission of issues arising from the latter's investigation of marketing support payments to securities dealers who sell mutual fund shares.
The investigation was disclosed by the company in SEC filings and press releases this year. The settlement is reflected in an order the SEC issued Monday instituting administrative and cease-and-desist proceedings, making findings, and imposing remedial sanctions against two subsidiaries, Franklin Templeton Distributors Inc. and Franklin Advisers Inc.
The San Mateo, Calif., parent company said its two subsidiaries consented to the settlement without admitting or denying its findings and agreed to a $20 million penalty and $1 in disgorgement. This money is to be distributed to certain Franklin Templeton funds in accordance with a plan to be developed by an independent distribution consultant to be retained by the parent company. It had accrued a charge of $21.5 million in its fiscal quarter ended June 30 related to this matter.
Franklin Resources had more than $388 billion of assets under management at Nov. 30.
