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A subsidiary of the investment firm Legg Mason Inc. has agreed to pay about $21 million to settle US government claims 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 did not disclose and quickly correct a computer coding error that caused losses for holders of about 100 employee-benefit retirement plans. They said most clients were notified nearly two years later, in 2010.
The government said the Pasadena, Calif.-based Legg Mason unit also improperly moved securities between client accounts.