It Depends on What You Mean by ‘Wrongdoing’

Market timing means having to say you’re guilty.

So contends Massachusetts’ chief securities regulator, who filed fresh civil fraud charges against Franklin Resources Inc. on Monday, just one month after reaching a settlement with the mutual fund giant over the rapid trading known as market timing.

Franklin, based in San Mateo, Calif., agreed Sept. 20 to pay $5 million to settle fraud charges brought by Massachusetts Secretary of the Commonwealth William F. Galvin, who had accused Franklin of allowing a high roller to make timing trades that violated fund rules.

In a consent order accompanying the settlement, Franklin admitted to statements of fact about its alleged misdeeds that appeared in Galvin’s complaint, saying it was doing so “solely for the purpose of settlement.”

Then, in a Securities and Exchange Commission filing made in connection with the settlement, Franklin said that it “did not admit or deny engaging in any wrongdoing.”

Galvin took issue with that contention in Monday’s complaint. It charges that Franklin made misleading statements by including that legal boilerplate in the Securities and Exchange Commission filing and called for the company to “cease and desist” and to pay an undetermined fine.

Franklin was “parsing” the language to try to shade the facts, Galvin said in an interview.

“They don’t seem to have learned their lesson,” he said. “We need to set the record straight.”

For its part, Franklin on Monday maintained the war of words and definitions with a statement:

“Franklin did not admit or deny that those facts constituted violations of Massachusetts securities laws. Franklin looks forward to working with Secretary Galvin to resolve this issue.”