BalkansCat
Updates at 10:10 AM ET with statement from CTPF.
The Chicago Teacher’s Pension Fund is poised to liquidate its investment in one of Western Asset Management’s flagship bond funds, an early repercussion from federal probes into the firm.
Western Asset Management Co., or Wamco, is a division of Franklin Resources (NYSE:BEN), also known as Franklin Templeton. Last week, Ken Leech, a co-chief investment officer at Wamco, went on leave after receiving a Wells Notice from the staff of the U.S. Securities and Exchange Commission. Later, Bloomberg News reported that the Justice Department also opened a criminal probe into its alleged practice of allocating more successful trades to favored clients.
The Chicago Teachers’ Pension Fund’s investment committee voted Tuesday to recommend ending Waco’s Core Plus fixed-income mandate, which managed $550M for the pension fund at the end of June, according to a statement by CTPF Chief Investment Officer Fernando Vinzons emailed to Seeking Alpha.
BEN stock slipped 0.5% in Wednesday morning trading.
The earliest that the CTPF’s board of trustees could take action is at its next meeting, scheduled for Sept. 19, CTPF’s Vinzons said.
Since the Wells Notice was disclosed on Aug. 21, Franklin Resources (BEN) stock has dropped ~11%.
