Franklin Advisers, Inc.
Latest Action: On September 24, 2008, the SEC announced an initial distribution of approximately $49 million to investors who were affected by improper market timing in mutual funds managed by Franklin Advisers, Inc. The SEC will make a second and final distribution of approximately $5.7 million next month. Investors can obtain additional information about the distribution by calling Boston Financial Data Services, Inc., the Fair Fund Administrator, at (866) 700-0131, and visiting the website of Franklin-Templeton.
Background: On August 2, 2004, the SEC instituted settled administrative and cease-and-desist proceedings against Franklin Advisers, Inc. The SECís Order found that Franklin allowed rapid in-and-out trading, known as market timing, in mutual funds it managed, contrary to the information in the prospectus. As part of the settlement, Franklin is required to pay $30 million in disgorgement and a $20 million civil penalty, for a total of $50 million. For more information on the SEC's action, you can read In the Matter of Franklin Advisers, Inc. at IA-2271 (Aug. 2, 2004).
Under the terms of the SEC's Order, an IDC must submit to the SEC a distribution plan for the distribution of the Fair Fund containing $50 million to investors. According to the Commission's Rules of Practice, notice of the proposed Distribution Plan must be published for at least 30 days, specifying how copies of the proposed Distribution Plan may be obtained, and describing the process by which persons may comment on the Plan. On June 6, 2007, the SEC published a Notice of Proposed Distribution Plan and Opportunity for Comment in connection with this matter. As stated in the notice, interested parties can print a copy of the Proposed Distribution Plan from the SECís public website or obtain a written copy of the plan by submitting a written request to:
All persons who want to comment on the Proposed Distribution Plan may submit their comments, in writing, no later than July 6, 2007. Comments received will be publicly available. Persons should submit only information that they wish to make publicly available.
Under the terms of the SEC's order, an Independent Distribution Consultant (IDC) submitted a distribution plan to the SEC. On May 9, 2008, the SEC approved the plan. You can read the SEC's Order Approving the Modified Plan of Distribution and the Modified Plan of Distributionhttp://www.sec.gov/divisions/enforce/claims/franklinadv.htm