To answer questions about allegations of unethical practices involving Franklin Templeton, the company directs inquirers to a statement on the company's Web site (www.franklintempleton.com/retail/jsp_cm/home/MF_trading_practices.jsp). The following is an excerpt from that statement.
Working with regulators. Franklin Resources is working with a number of government regulators who are looking into matters involving frequent trading policies and practices and other industry concerns.
The Securities Division of the Office of the Secretary of the Commonwealth of Massachusetts has filed an administrative complaint against Franklin Resources, Inc., and certain of its subsidiaries, alleging a violation of the Massachusetts Uniform Securities Act in 2001. The Company is confident that no investors in the mutual fund were harmed by the investment.
In early February 2004, the Staff of the SEC informed the Company that it intended to recommend that the SEC authorize a civil injunctive action against Franklin Advisers, Inc. and Gregory Johnson, who is president and co-chief executive officer of Franklin Resources, Inc. The Company was recently informed that the Staff of the Securities and Exchange Commission no longer intends to recommend that the SEC authorize a civil action against Gregory Johnson. The Company continues discussions with the Staff of the SEC in an effort to resolve the issues raised with respect to Franklin Advisers, Inc.
