WASHINGTON (AP) — A subsidiary of investment firm Legg Mason Inc. has agreed to pay about $21 million to settle U.S. government claims that it concealed losses to investors and engaged in prohibited transactions that favored some clients over others.
The settlement with Western Asset Management was announced Monday by the Securities and Exchange Commission and the Labor Department. The agencies said Western Asset didn't disclose and quickly correct a computer coding error that caused losses for holders of about 100 employee-benefit retirement plans. They said clients were notified nearly two years later.
The government said the Pasadena, Calif.-based Legg Mason unit also improperly moved securities among client accounts.
Western Asset neither admitted nor denied wrongdoing. It agreed to return about $17.4 million to employee-benefit plans and to pay $3.6 million in penalties.
Shares of Baltimore-based Legg Mason dropped 86 cents, or 2 percent, to $41.37 in afternoon trading.