Galvin Charges Franklin For Not Admitting Guilt
November 1, 2004
Franklin Templeton Investments filed "false and misleading statements" with the Securities and Exchange Commission by not admitting to wrongdoing in settling its mutual fund case, Massachusetts Secretary of the Commonwealth William Galvin has charged.
In a civil complaint, Galvin said the company should be forced to pay administrative fees for not following an order, namely to admit wrongdoing, on Sept. 20 when it paid $5 million to settle charges that it allowed a hedge fund to time the market. That settlement came one month after Franklin Templeton settled for $50 million with federal regulators. Franklin Templeton called the situation a misunderstanding, and said it looked forward to working with Galvin in rectifying it. The company's contention was that it admitted the facts of the case, but did not admit that its actions constituted a violation of Massachusetts' securities law. "An important element in correcting abuses in fund trading is that violators be required to admit their wrongdoing," Galvin said in a statement.