Franklin Templeton Investments settled with California this week for failing to disclose its shelf-space arrangements with brokers. The fund company agreed to pay $18 million, $14 million of which will be refunded to investors, said California Attorney General Bill Lockyer. Another $2 million is for a civil penalty and $2 million is to reimburse Lockyer’s office for the investigation.

In settling, the company admitted no wrongdoing but agreed to fully disclose its shelf-space arrangements to investors going forward.

Lockyer settled a similar case with PIMCO for $9 million in September. His investigation into American Funds is ongoing.

"Most mutual fund investors are families with modest incomes," Lockyer said. "They work hard for their money, and when they invest it, they deserve to be told the whole truth so they can make informed decisions."

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