Franklin Resources Inc. saw a decrease in its shares by as much as 7.7% due to reports of an investigation by the Commodity Futures Trading Commission into trades at Western Asset Management Co.
The company, also known as Wamco, experienced significant outflows, with $18 billion in long-term cash withdrawn in the previous month alone. Since the investigation was announced and Co-Chief Investment Officer Ken Leech was placed on leave, Wamco has witnessed a massive $53 billion in outflows.
Federal authorities are looking into allegations that Leech may have favored certain clients by selecting winning trades, which has raised concerns about the firm's trading practices.