Putnam Investment Management, Llc

Allegations: ON AUGUST 27, 2018, THE SEC ISSUED AN ORDER THAT FOUND THAT LEGG MASON HAD VIOLATED SECTION 13(B)(2)(B) OF THE SECURITIES EXCHANGE ACT OF 1934 BY FAILING TO DEVISE AND MAINTAIN A SYSTEM OF APPROPRIATE INTERNAL ACCOUNTING CONTROLS WITH RESPECT TO THEUSE OF INTRODUCING BROKERS AND OTHER INTERMEDIARIES IN EMERGING MARKETS, INCLUDING LIBYA, AND THAT IMPOSED A CEASE-AND-DESIST ORDER ON LEGG MASON WITH RESPECT TO ANY VIOLATIONS ORFUTURE VIOLATIONS OF SECTION 13(B)(2)(B). PREVIOUSLY, LEGG MASON HAD SUBMITTED AN OFFER OF SETTLEMENT INCONNECTION WITH THE MATTER WHICH THE SEC DETERMINED TO ACCEPT. THE ORDER RESOLVED A FCPA INVESTIGATIONCONCERNING THE ACTIVITIES OF LEGG MASON'S FORMER PERMAL BUSINESS IN CONNECTION WITH MANAGING ASSETS OF LIBYANGOVERNMENTAL ENTITIES IN STRUCTURES ESTABLISHED BY A THIRD-PARTY FINANCIAL INSTITUTION. THOSE INVESTMENTS WERE MADE IN CALENDAR YEARS 2005-2007 AND ALL WERE TERMINATED BY 2012. THE MATTER DOES NOT RELATE TO ANY CURRENTBUSINESS ACTIVITIES OR CLIENT RELATIONSHIPS OF LEGG MASON OR ANY AFFILIATE, AND WAS FOCUSED ON THE ACTIONS OFFORMER PERMAL EMPLOYEES WHO LEFT THAT FIRM FOUR OR MORE YEARS AGO. Status: Final Sanction Detail: THE ORDER REQUIRED LEGG MASON TO PAY DISGORGEMENT OF $27,594,729 AND PREJUDGMENT INTEREST OF $6,907,765 TO THE SEC. THE SEC DID NOT IMPOSE ITS OWN PENALTY BASED UPON THE PENALTY PAID TO RESOLVE A DOJ INVESTIGATION ARISING OUT OF THE SAME MATTER, AS DESCRIBED IN THE RESPONSE TO ITEM 2 ABOVE. Summary: ON AUGUST 27, 2018, THE SEC ISSUED AN ORDER THAT CONTAINED FINDINGS THAT LEGG MASON HAD VIOLATED SECTION 13(B)(2)(B) OF THE SECURITIES EXCHANGE ACT BY FAILING TO DEVISE AND MAINTAIN APPROPRIATE INTERNAL ACCOUNTINGCONTROLS WITH RESPECT TO THE USE OF INTRODUCING BROKERS AND OTHER INTERMEDIARIES IN EMERGING MARKETS,INCLUDING LIBYA, AND THAT IMPOSED A CEASE-AND-DESIST ORDER ON LEGG MASON WITH RESPECT TO ANY VIOLATIONS ORFUTURE VIOLATIONS OF SECTION 13(B)(2)(B). PREVIOUSLY, LEGG MASON HAD SUBMITTED AN OFFER OF SETTLEMENT WHICH THESEC DETERMINED TO ACCEPT. THE ORDER RESOLVED A FCPA INVESTIGATION CONCERNING THE ACTIVITIES OF LEGG MASON'SFORMER PERMAL BUSINESS IN CONNECTION WITH MANAGING ASSETS OF LIBYAN GOVERNMENTAL ENTITIES IN STRUCTURES ESTABLISHED BY A THIRD-PARTY FINANCIAL INSTITUTION. PURSUANT TO THE ORDER, THE SEC ORDERED LEGG MASON TO CEASEAND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND FUTURE VIOLATIONS OF SECTION 13(B)(2)(B) OF THESECURITIES EXCHANGE ACT OF 1934 AND TO PAY DISGORGEMENT OF $27,594,729 AND PREJUDGMENT INTEREST OF $6,907,765FOR A TOTAL PAYMENT OF $34,502,944. SEPARATELY, ON JUNE 4, 2018 LEGG MASON AGREED TO PAY A PENALTY AND DISGORGEMENT TO RESOLVE A DOJ INVESTIGATION ARISING OUT OF THE SAME MATTER, AS DESCRIBED IN THE RESPONSE TOITEM 2 ABOVE.

Allegations: PUTNAM INVESTMENT MANAGEMENT, LLC ("PUTNAM") ENTERED INTO A SETTLEMENT AGREEMENT WITH THE SEC ON SEPTEMBER 27, 2018. THE SETTLEMENT AGREEMENT STATES: (I) A TRADER FORMERLY EMPLOYED BY PUTNAM ENGAGED IN PREARRANGED TRADES IN CERTAIN MORTGAGE-BACKED SECURITIES, (II) AS A RESULT OF THESE UNDISCLOSED PREARRANGED TRADES PUTNAM DID NOT SEEK BEST EXECUTION, (III) PUTNAM DID NOT ENSURE COMPLIANCE WITH APPLICABLE POLICIES REGARDING CROSS-TRADES AND FAILED TO SUPERVISE THE FORMER EMPLOYEE. THE SEC FOUND VIOLATIONS OF SECTIONS 203(E) (6), 206 (2) (4), AND 207 OF THE INVESTMENT ADVISERS ACT, AND SECTION 17(A) OF THE INVESTMENT COMPANY ACT. THE SEC ENTERED A CEASE AND DESIST ORDER, AND PUTNAM PAID A $1,000,000 FINE AND AGREED TO REIMBURSE THE CLIENTS THAT PARTICIPATED IN THE RELEVANT TRADES IN AN AGGREGATE AMOUNT OF $1,095,006.10. Status: Final Sanction Detail: THE SEC ENTERED A CEASE AND DESIST ORDER, AND PUTNAM PAID A $1,000,000 FINE AND AGREED TO REIMBURSE THE CLIENTS THAT PARTICIPATED IN THE RELEVANT TRADES IN AN AGGREGATE AMOUNT OF $1,095,006.10. Summary: PUTNAM INVESTMENT MANAGEMENT, LLC ("PUTNAM") ENTERED INTO A SETTLEMENT AGREEMENT WITH THE SEC ON SEPTEMBER 27, 2018. THE SETTLEMENT AGREEMENT STATES: (I) A TRADER FORMERLY EMPLOYED BY PUTNAM ENGAGED IN PREARRANGED TRADES IN CERTAIN MORTGAGE-BACKED SECURITIES, (II) AS A RESULT OF THESE UNDISCLOSED PREARRANGED TRADES PUTNAM DID NOT SEEK BEST EXECUTION, (III) PUTNAM DID NOT ENSURE COMPLIANCE WITH APPLICABLE POLICIES REGARDING CROSS-TRADES AND FAILED TO SUPERVISE THE FORMER EMPLOYEE. THE SEC FOUND VIOLATIONS OF SECTIONS 203(E) (6), 206 (2) (4), AND 207 OF THE INVESTMENT ADVISERS ACT, AND SECTION 17(A) OF THE INVESTMENT COMPANY ACT. THE SEC ENTERED A CEASE AND DESIST ORDER, AND PUTNAM PAID A $1,000,000 FINE AND AGREED TO REIMBURSE THE CLIENTS THAT PARTICIPATED IN THE RELEVANT TRADES IN AN AGGREGATE AMOUNT OF $1,095,006.10.