Western Asset Management Company, Llc

Event Detail: THE CHARGES AGAINST MR. LEECH INCLUDE THE FOLLOWING FIVE FELONY COUNTS: VIOLATING THE INVESTMENT ADVISERS ACT OF 1940 (SECTIONS 206 AND 217), VIOLATING THE SECURITIES EXCHANGE OF 1934 (SECTION 10(B) AND RULE 10B-5 THEREUNDER AND SECTION 32), VIOLATING THE COMMODITY EXCHANGE ACT (SECTIONS 9(1) AND 13(A)(5)) AND MAKING FALSE STATEMENTS UNDER 18 USC SECTION 1001(A)(1)-(2). THE CHARGES RELATE TO SEPARATELY MANAGED ACCOUNTS AND REGISTERED INVESTMENT COMPANIES. MR. LEECH HAS PLEADED NOT GUILTY TO EACH COUNT. Status: Pending Summary: THE CHARGES ALLEGE THAT BETWEEN 2021 AND OCTOBER 2023 MR. LEECH ENGAGED IN INAPPROPRIATE TRADE ALLOCATIONS OF TREASURY FUTURES AND OPTIONS WHERE FAVORED ACCOUNTS WERE ALLOCATED TRADES THAT DID BETTER DURING THEIR FIRST DAY AND TRADES WITH LESSER PERFORMANCE DURING THEIR FIRST DAY WERE ALLOCATED TO DISFAVORED ACCOUNTS. THE CHARGES REMAIN PENDING.

Allegations: VIOLATIONS OF SEC 17(A)(1) AND (3) OF THE SECURITIES ACT, SEC 10(B) AND RULE 10B-5(A) AND (C) THEREUNDER UNDER THE EXCHANGE ACT, SEC 206(1) AND (2) OF THE ADVISERS ACT, AND SEC 36(A) AND 37 OF THE INVESTMENT COMPANY ACT. Status: Pending Summary: THE ALLEGATIONS ARE THAT BETWEEN 2021 AND OCTOBER 2023 MR. LEECH ENGAGED IN INAPPROPRIATE TRADE ALLOCATIONS OF TREASURY FUTURES AND OPTIONS WHERE FAVORED ACCOUNTS WERE ALLOCATED TRADES THAT DID BETTER DURING THEIR FIRST DAY AND TRADES WITH LESSER PERFORMANCE DURING THEIR FIRST DAY WERE ALLOCATED TO DISFAVORED ACCOUNTS. THE CLAIMS REMAIN PENDING.

Allegations: WESTERN ASSET MANAGEMENT COMPANY WAS ALLEGED TO HAVE BREACHED CERTAIN PROVISIONS OF ERISA IN CONNECTION WITH CERTAIN TRADES THAT WERE ALLEGED TO BE CROSS TRADES. Status: Final Sanction Detail: AS PART OF THE SETTLEMENT WESTERN ASSET ALSO MADE COMPENSATORY PAYMENTS TO IMPACTED CLIENTS TOTALING $6,077,175. Summary: WESTERN ASSET MANAGEMENT COMPANY WAS ALLEGED TO HAVE BREACHED CERTAIN PROVISIONS OF ERISA IN CONNECTION WITH CERTAIN TRADES THAT WERE ALLEGED TO BE CROSS TRADES. WITHOUT ADMITTING OR DENYING THE FINDINGS, ON JANUARY 27, 2014, WESTERN ASSET ENTERED INTO A SETTLEMENT WITH THE US DEPARTMENT OF LABOR WITH RESPECT TO ERISA CLIENTS AND AGREED TO PAY A FINE OF $607,717. AS PART OF THE SETTLEMENT WESTERN ASSET ALSO MADE COMPENSATORY PAYMENTS TO IMPACTED CLIENTS TOTALING $6,077,175.

Allegations: WESTERN ASSET MANAGEMENT COMPANY WAS ALLEGED TO HAVE BREACHED CERTAIN PROVISIONS OF ERISA ARISING FROM THE PURCHASE BY ERISA ACCOUNTS OF A SECURITY THAT WAS NOT AN ELIGIBLE INVESTMENT FOR ERISA ACCOUNTS AND THE SUBSEQUENT HANDLING OF THE MATTER. Status: Final Sanction Detail: AS PART OF THE SETTLEMENT WESTERN ASSET ALSO MADE COMPENSATORY PAYMENTS TO IMPACTED CLIENTS TOTALING $10,000,000. Summary: WESTERN ASSET MANAGEMENT COMPANY WAS ALLEGED TO HAVE BREACHED CERTAIN PROVISIONS OF ERISA ARISING FROM THE PURCHASE BY ERISA ACCOUNTS OF A SECURITY THAT WAS NOT AN ELIGIBLE INVESTMENT FOR ERISA ACCOUNTS AND THE SUBSEQUENT HANDLING OF THE MATTER. ON JANUARY 27, 2014, WITHOUT ADMITTING OR DENYING THE FINDINGS, WESTERN ASSET ENTERED INTO A SETTLEMENT WITH THE US DEPARTMENT OF LABOR AND AGREED TO PAY A FINE OF $1,000,000. AS PART OF THE SETTLEMENT WESTERN ASSET ALSO MADE COMPENSATORY PAYMENTS TO IMPACTED CLIENTS TOTALING $10,000,000.

Allegations: WESTERN ASSET MANAGEMENT COMPANY WAS ALLEGED TO HAVE BREACHED CERTAIN PROVISIONS OF THE INVESTMENT ADVISERSACT AND INVESTMENT COMPANY ACT IN CONNECTION WITH CERTAIN TRADES THAT WERE ALLEGED TO BE CROSS TRADES. Status: Final Sanction Detail: AS PART OF THE SETTLEMENT WESTERN ASSET ALSO MADE COMPENSATORY PAYMENTS TO IMPACTED CLIENTS TOTALING$7,440,881. Summary: WESTERN ASSET MANAGEMENT COMPANY WAS ALLEGED TO HAVE BREACHED CERTAIN PROVISIONS OF THE INVESTMENT ADVISERSACT AND INVESTMENT COMPANY ACT IN CONNECTION WITH CERTAIN TRADES THAT WERE ALLEGED TO BE CROSS TRADES. ONJANUARY 27, 2014, THE SECURITIES AND EXCHANGE COMMISSION ISSUED AN ORDER INSTITUTING A PUBLIC ADMINISTRATIVEPROCEEDING, MAKING FINDINGS AND IMPOSING SANCTIONS. WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS, WESTERNASSET CONSENTED TO THE ENTRY OF THE ORDER, WAS CENSURED, AGREED TO UNDERTAKE CERTAIN REMEDIAL MEASURES, ANDAGREED TO PAY A FINE OF $1,000,000. AS PART OF THE SETTLEMENT WESTERN ASSET ALSO MADE COMPENSATORY PAYMENTS TOIMPACTED CLIENTS TOTALING $7,440,881.

Allegations: WESTERN ASSET MANAGEMENT COMPANY WAS ALLEGED TO HAVE BREACHED CERTAIN PROVISIONS OF THE INVESTMENT ADVISERS ACT AND INVESTMENT COMPANY ACT IN CONNECTION WITH CERTAIN TRADES THAT WERE ALLEGED TO BE CROSS TRADES. Status: Final Sanction Detail: AS PART OF THE SETTLEMENT WESTERN ASSET ALSO MADE COMPENSATORY PAYMENTS TO IMPACTED CLIENTS TOTALING $7,440,881. Summary: WESTERN ASSET MANAGEMENT COMPANY WAS ALLEGED TO HAVE BREACHED CERTAIN PROVISIONS OF THE INVESTMENT ADVISERS ACT AND INVESTMENT COMPANY ACT IN CONNECTION WITH CERTAIN TRADES THAT WERE ALLEGED TO BE CROSS TRADES. ON JANUARY 27, 2014, THE SECURITIES AND EXCHANGE COMMISSION ISSUED AN ORDER INSTITUTING A PUBLIC ADMINISTRATIVE PROCEEDING, MAKING FINDINGS AND IMPOSING SANCTIONS. WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS, WESTERN ASSET CONSENTED TO THE ENTRY OF THE ORDER, WAS CENSURED, AGREED TO UNDERTAKE CERTAIN REMEDIAL MEASURES, AND AGREED TO PAY A FINE OF $1,000,000. AS PART OF THE SETTLEMENT WESTERN ASSET ALSO MADE COMPENSATORY PAYMENTS TO IMPACTED CLIENTS TOTALING $7,440,881.

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 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 OR FUTURE VIOLATIONS OF SECTION 13(B)(2)(B). PREVIOUSLY, LEGG MASON HAD SUBMITTED AN OFFER OF SETTLEMENT IN CONNECTION WITH THE MATTER WHICH THE SEC DETERMINED TO ACCEPT. THE ORDER RESOLVED A FCPA INVESTIGATION CONCERNING THE ACTIVITIES OF LEGG MASON'S FORMER PERMAL BUSINESS IN CONNECTION WITH MANAGING ASSETS OF LIBYAN GOVERNMENTAL 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 CURRENT BUSINESS ACTIVITIES OR CLIENT RELATIONSHIPS OF LEGG MASON OR ANY AFFILIATE, AND WAS FOCUSED ON THE ACTIONS OF FORMER 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 ACCOUNTING CONTROLS 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 OR FUTURE VIOLATIONS OF SECTION 13(B)(2)(B). PREVIOUSLY, LEGG MASON HAD SUBMITTED AN OFFER OF SETTLEMENT WHICH THE SEC DETERMINED TO ACCEPT. THE ORDER RESOLVED A FCPA INVESTIGATION CONCERNING THE ACTIVITIES OF LEGG MASON'S FORMER 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 CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND FUTURE VIOLATIONS OF SECTION 13(B)(2)(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND TO PAY DISGORGEMENT OF $27,594,729 AND PREJUDGMENT INTEREST OF $6,907,765 FOR 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 TO ITEM 2 ABOVE.