A former Franklin Templeton portfolio manager sued the investment management firm Sunday, alleging that he was retaliated against and ultimately fired after reporting that his manager committed "serious egregious trading fraud."
Jordan Strah alleged that he refused a request to resign "and continued his pursuit of stopping (the manager) from deceiving Franklin Templeton's investors," according to the lawsuit filed in U.S. District Court for the Southern District of New York against Franklin Templeton, including a subsidiary Connecticut alternative advisory firm, K2 Advisors, now known as the Absolute Return Portfolio Management Team.
After a series of retaliatory actions, Franklin Templeton terminated Strah's employment on March 25, 2025, "for the purported pretextual reason of a reduction in force," the complaint alleges. At the time, he had been managing the Franklin K2 Cat Bond UCITS Fund, a natural catastrophe bond fund. He alleges that his firing left only "woefully unqualified" people to manage it, according to the complaint.
Strah's LinkedIn profile indicates that he worked for Franklin Templeton for over three years, first as a vice president-research analyst and portfolio manager, then as a senior analyst and in his final seven months there as a portfolio manager.
He alleges in the complaint that he was more qualified than his manager, and that in June 2023, while doing typical end-of-week pricing uploads, he noticed that the manager had placed an order for a bond that Strah knew earlier in the day had screened out of the funds' promised rules-based process. The bond order violated the process that K2 Advisors had told investors it would use, the suit says.
Strah alleges that he then spent the weekend collecting data to determine what the manager allegedly had altered in the database to render the bond a "buy" when it was a "no buy,' and that he "discovered a clustering of fraud," including "a pattern of manipulated data spanning multiple bonds," the lawsuit states.
Four days later, Strah reported his findings to a risk management team, and alleges he later found additional discrepancies and potential fraud. The manager's own boss and a K2 officer, however, later told Strah that Franklin Templeton compliance had found inconclusive evidence that the initial discrepancies were fraud and that they were not going to fire his manager, the complaint alleges.
When Strah told them he refused to work with someone who commits fraud, the boss' boss suggested that Strah resign, a recommendation that "shocked" him. Months later, after compliance training, he spoke to a firm general counsel and presented his fraud concerns, the complaint says. That executive later told him that the first probe had been properly handled and that the K2 compliance team had no outstanding concerns, the suit states.
Strah continued to pursue the matter and made multiple complaints to firm executives, according to the lawsuit, which states that Strah's manager's employment was terminated in May 2024. Strah later was demoted and dismissed, the suit says.
"The company strongly disputes the allegations and will be responding through the legal process. As this is ongoing litigation involving a personnel matter, we will not comment further," Franklin Templeton spokesperson Jeaneen Terrio told ThinkAdvisor by email Monday.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.