Shares of Franklin Resources, the $1.7tn asset management firm better known as Franklin Templeton, were on pace for their largest drop in four years after the company disclosed on 21 August that the Securities and Exchange Commission had sent a Wells Notice to a top executive of one of Franklin’s money management businesses.

The SEC recently sent the notice to Ken Leech, who had been the co-chief investment officer and a long-time fixture of Western Asset, the fixed-income manager owned by Franklin. Wells Notices inform a person or a company involved in an investigation that the regulator intends to bring an action against them.