Franklin Resources' legal problems were extended to the tune of a massive class-action lawsuit filed by California investors.

Filed by law firm Milberg Weiss Bershad Hynes & Lerach, the suit alleges Franklin's fund managers permitted favored clients to time a number of its funds at the expense of long-term shareholders.

Investors in Nevada have filed similar charges alleging that the firm allowed Daniel Calugar, former head of the now-defunct Security Investors Inc. to pour $10 million into a Franklin hedge fund in exchange for the ability to market time an estimated $50 million in mutual fund assets.

Beside naming Calugar and Security Brokerage, the California suit also implicates portfolio manager William Post.

Copyright 2004 Thomson Media Inc. All Rights Reserved.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.