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Franklin Resources’s (NYSE:BEN) Western Asset Management arm is undergoing a wave of investor redemptions at its flagship core plus bond fund following a federal probe into the firm’s co-chief investment officer Ken Leech, according to a Tuesday media report.
The company said on Aug. 21 that Leech is on leave of absence after recently receiving a Wells Notice from the staff of the U.S. Securities and Exchange Commission. That’s when outflows started to accelerate.
Franklin Resources (BEN) stock slipped 0.9% in Tuesday midafternoon trading. Since the announcement of Leech’s leave, shares have dived about 15%.
Over the past three weeks, some $4.8B of investor funds have been withdrawn from the Western Asset Core Plus Bond Fund (MUTF:WACPX), Bloomberg reported, citing Morningstar Direct. The mutual bond fund had $14.3B as of Monday, down 36% year-to-date.
