WEST PALM BEACH, Florida (HEDGECO.NET) – The largest pension scheme in the United States, the California Public Employees Retirement System[CALpers] has started its review process for FranklinResources Inc, whose investment management arm Franklin Advisors oversees CAPpers US$780 million stock fund, according to a released statement by CALpers spokesman Brad Pacheco. Such review wasnecessitated by the improper mutual fund trading charges involving three employees of the company.
Putnam Investments have been fired by the CALpers board over the mutual fund scandal. Franklin Management suspended one of its executive officers and another employee, over inappropriate short term trades in their 401[k] retirement plans. Another Franklin employee was also suspended for improper trading allegations, following an internal company audit.
Putnam Investments managed CALPers international stock portfolio valued at US$1.2 billion. According to Pacheco, one of the individuals involved in the illegal mutual fund trading activities was also the key person overseeing the CALPers portfolio. According to Pacheco, the CALPers management wanted to take a closer look at the situation by meeting with Franklin authorities through an investigation of the matter. The spokeswoman for Franklin Resources, Lisa Gallegos said Franklin Resources have fully cooperated with government regulators, by providing them with requested information.
Regarding the ongoing CALPers investigation, Gallegos said� We will absolutely cooperate�, she also noted that Franklin have not been charged with any civil complaints. CALPers retirement fund is valued at US$155 billion, about 6-7% of its assets have been devoted to hedge fund managers.
Paul Oranika
Editor-in-chief
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