Nov. 17, 2004 — Franklin Resources (BEN) will pay $18 million to settle charges that it paid brokers to promote its mutual funds, the California Attorney General said on Wednesday.
Under the settlement, Franklin Templeton Distributors Inc., a Franklin Resources unit that distributes Franklin, Templeton and Mutual Series funds, will disgorge $14 million back to the funds. It will also pay $2 million in civil penalties for violating the California Corporate Securities Law, and another $2 million to cover costs.
The settlement resolves a lawsuit charging that the unit violated state securities laws by not adequately informing investors about agreements to pay broker-dealers to recommend and sell Franklin's funds.
