Franklin Resources Inc. will begin integrating parts of its Western Asset Management Co. unit as it faces a Securities and Exchange Commission investigation involving its prominent bond manager, Ken Leech. The transition will see Wamco's middle office operations merged into the larger firm, as announced by Franklin CEO Jenny Johnson and Wamco CEO Jim Hirschmann during a recent town hall meeting.
Shares of Franklin Resources Inc. dropped by as much as 7.7% following news of a Commodity Futures Trading Commission investigation into Western Asset Management Co. The firm has experienced $53 billion in outflows since it was revealed that Co-Chief Investment Officer Ken Leech is under scrutiny for potentially favoring certain clients with winning trades.
Western Asset Management Co.'s flagship core plus bond mutual fund has seen its assets plummet below $10 billion due to a wave of investor redemptions. The fund's size dropped from $22.3 billion at the start of 2024 to $9.96 billion as of November 1, following the announcement of Co-Chief Investment Officer Ken Leech's leave amid a federal investigation. For more details, visit [Bloomberg](https://www.bloomberg.com) and [SEC](https://www.sec.gov).
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