Legg Mason Inc. charged itself $1.2 million in the third quarter in anticipation of settlement costs stemming from negotiations with the Securities and Exchange Commission over improper mutual fund trades, a company filing with the Commission shows.

In its quarterly report, the company was quick to note that the charge does not indicate a specific amount, and admitted that the actual settlement could be for an even greater amount of money. The Baltimore-based firm is still negotiating over charges of improper trades at a company subsidiary, Legg Mason Wood Walker.

The SEC is said to be conducting two separate investigations at Legg Mason Wood Walker, and the settlement talks only pertain to one of those investigations. The company did not elaborate on either investigation, only saying that it could not make any predictions on outcomes and that those investigations are related to late trading and market timing.

New York Attorney General Eliot Spitzer, who touched off the industry-wide probe last September, has also subpoenaed Legg Mason.

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