Jan. 27 (Bloomberg) — Western Asset Management Co., a unit of Legg Mason Inc., will pay more than $21 million to settle charges of defrauding clients, the U.S. Securities and Exchange Commission said.
Western Asset, based in Pasadena, California, concealed investor losses that resulted from a coding error and engaged in cross trading of mortgage-backed securities that favored some clients over others, the SEC said in a statement today.
The money manager breached its fiduciary duty by failing to disclose and promptly correct an error that resulted in about 100 clients allocating money to a private investment that was prohibited by their retirement plans, the SEC said. Western Asset should have reimbursed its clients for the losses on the investment, which had fallen in value, instead of failing to notify clients until two years later, after it had liquidated the investment from their accounts.
Continue Reading for Free
Register and gain access to:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.