Investigation Launched into Franklin Resources, Inc. for Possible Securities Fraud

NEW YORK, Nov. 08, 2024 (GLOBE NEWSWIRE) -- Bleichmar Fonti & Auld LLP, a prominent securities law firm, has announced an investigation into Franklin Resources, Inc. (NYSE: BEN) for possible violations of federal securities laws. This development has raised concerns among investors who may have suffered losses as a result.

Why is Franklin Resources Under Scrutiny?

Franklin Resources, often referred to as Franklin Templeton, is a major player in asset management, overseeing around $1.7 trillion in assets. A significant part of its operation rests with its Western Asset Management (WAM) division, known for managing fixed income investments.

On July 26, 2024, Franklin Resources disclosed that it had initiated an internal investigation related to past trade allocations of treasury derivatives within certain WAM accounts. Following this, the company informed shareholders that it had received notification about concurrent investigations being conducted by both the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice. This announcement led to a 2.4% drop in the company's stock price, declining from $23.64 on July 25, 2024, to $23.08 the next day.

Further turmoil followed on August 21, 2024, when the company confirmed that Ken Leech, co-Chief Investment Officer of WAM, had been placed on leave immediately after receiving a Wells Notice from the SEC. In light of this development, Franklin Resources decided to close its Macro Opportunities strategy, which managed approximately $2 billion in assets as of July 31, 2024. Reports emerged, indicating that federal prosecutors in New York were investigating Leech's actions regarding trade allocations, suspected to involve favoritism in what is termed ''cherry-picking.'' As a result of these revelations, the company's stock plummeted by 13%, from a closing price of $22.62 on August 20, 2024, to $19.78 by August 21.

On November 4, 2024, Franklin Resources released its preliminary financial results for the fourth quarter and fiscal year 2024, announcing over $31 billion in long-term net outflows. This figure marked a staggering 354% increase compared to the previous year's quarter, including $37 billion in outflows specifically from the WAM division. The company also reported a net loss of $84.7 million, a stark contrast to a net income of $174 million in the previous quarter. The announcement contributed to a nearly 3% decline in stock price on the same day.

What Should Affected Investors Do?

If you are an investor in Franklin Resources, Inc. and believe you may have been impacted by these developments, there may be legal options available to you. It is recommended that you submit your information to legal representatives for consideration. All legal representation is conducted on a contingency fee basis, meaning you do not have to pay any legal fees unless recovery is made.

About Bleichmar Fonti & Auld LLP

Bleichmar Fonti & Auld LLP is an established international law firm that specializes in representing plaintiffs in securities class actions and shareholder litigation. The firm has achieved notable successes, including recovering significant sums from major corporations like Tesla, Inc. and Teva Pharmaceutical Industries Ltd..

For more information on their investigation into Franklin Resources, visit their website for further details.

investigation, securities, fraud