Western Asset Management settles SEC charges tied to former executive’s alleged cherry-picking scheme, impacting $229bn fixed-income group.
Western Asset Management, a Franklin Templeton subsidiary, will pay a $100m civil penalty to resolve SEC allegations linked to improper trade allocations by its former co-CIO. The SEC found the firm failed to detect or prevent the misconduct, which involved favoring selected portfolios in a scheme prosecutors labeled criminal fraud.
The fixed-income manager oversaw $229bn in assets as of March 2026 but has since faced $150bn in long-term net outflows following the 2024 charges against its ex-executive. Franklin Templeton reported $17bn in Q2 net inflows overall, though Western Asset contributed a $4.1bn outflow.
Franklin Templeton, which manages $1.7tn in assets, stated the DOJ has concluded its investigation into the matter without further action against Western Asset.