Massachusetts regulators charged that Franklin did, in fact, admit wrongdoing when it reached a $5 million settlement with them in September. Therefore, by obfuscating this in a subsequent SEC filing on Sept. 20, Franklin committed fraud, Massachusetts said in an Oct. 25 lawsuit.
In the Sept. SEC filing, the firm had said its Franklin Advisers and Franklin Templeton Alternative Strategies units "did not admit or deny engaging in any wrongdoing." Although the Monday filing made no mention of any admission or denial of any wrongdoing, it did say that its Sept. 20 SEC filing failed to indicate "Franklin admitted to the divisions statement of facts."
A spokeswoman for the firm said the settlement now encompasses all of Massachusetts regulators concerns. A notice on Franklins Web site said it paid no monetary penalty in reaching the civil settlement.
