June 4, 2018
To Our Valued Stakeholders,
Legg Mason has reached a settlement with the U.S. Department of Justice resolving a legacy matter, involving the activities of two mid-to-lower level employees that occurred more than a decade ago at our former Permal business. We soon expect to reach a settlement in principle with the U.S. Securities and Exchange Commission staff regarding the same matter which will be subject to the review and approval of the SEC Commissioners. Having spent close to seven years cooperating fully with the government’s inquiries, we are pleased to put the U.S. Department of Justice portion of this matter behind us and move forward.
However, let me be very clear: the misconduct by former employees of the legacy Permal business that the government found was totally unacceptable. It violated our high standards, our long-held core values and our “no-chalk” culture.
As you should expect, Legg Mason has, over the past decade, substantially enhanced its anti-corruption oversight, compliance policies, procedures and other related mechanisms, and has put in place a robust set of related training programs.
Legg Mason is especially proud to be the first organization globally to have been certified by PECB North America for compliance with the ISO 37001 anti-corruption controls standards.
On the following page, you will find additional information about today’s settlement, including an overview of the activities that occurred a decade ago; the resolutions we have reached with the Department of Justice and the associated financial penalties; and, the compliance policies, procedures and other related mechanisms that are in place at Legg Mason today.
Legg Mason and each of our nine diverse, independent affiliate companies expect to conduct business and serve our investor clients each and every day with complete integrity. While certainly disappointed about this matter, we remain proud of and resolute in our commitment to our culture of “no chalk” and our mission of “Investing to Improve Lives.”