SEC trading case leads to compliance overhaul (IGNITES)

An SEC settlement last month centered on violations of trading practices shows how imperative it is for proper trade compliance oversight. The SEC found that Western Asset Management (Wamco) failed to reasonably supervise its former Co-Chief Investment Officer, whose trade allocation practices went unnoticed for a lengthy period creating major losses in certain mutual fund portfolios. According to the settlement, the firm failed to take proper steps to ensure the trading practices at issue were in line with its policies and procedures. The case resulted in significant changes for the firm’s compliance structure and it has subsequently been integrated into Franklin Templeton, its parent company’s global compliance and governance unit, requiring adherence to its global trade allocation policy. See IGNITES (subscription required), “Wamco Puts SEC’s Leech Claims Behind It, but Fallout Lingers”