LMP Capital and Income (NYSE:SCD)
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From Jul 2019 to Jul 2024
The following Citigroup closed-end funds - Salomon
Brothers Capital and Income Fund Inc., Salomon Brothers Emerging
Markets Debt Fund Inc., Salomon Brothers Emerging Markets Floating
Rate Fund Inc., Salomon Brothers Emerging Markets Income Fund Inc.,
Salomon Brothers Emerging Markets Income Fund II Inc., Salomon
Brothers Global High Income Fund Inc., Salomon Brothers Global
Partners Income Fund Inc., Salomon Brothers Inflation Management Fund
Inc., Salomon Brothers Municipal Partners Fund Inc., Salomon Brothers
Municipal Partners Fund II Inc., The Salomon Brothers Fund Inc,
Salomon Brothers High Income Fund Inc, Salomon Brothers High Income
Fund II Inc, Salomon Brothers Variable Rate Strategic Fund Inc.,
Salomon Brothers 2008 Worldwide Dollar Government Term Trust Inc. and
Salomon Brothers Worldwide Income Fund Inc. - today issued the
following statement:
On May 31, 2005, the U.S. Securities and Exchange Commission
("SEC") issued an order in connection with the settlement of an
administrative proceeding against Smith Barney Fund Management LLC
("SBFM") and Citigroup Global Markets Inc. ("CGMI") (each an affiliate
of the manager) relating to the appointment of an affiliated transfer
agent for the Smith Barney family of mutual funds (the "Affected
Funds").
The SEC order finds that SBFM and CGMI willfully violated Section
206(1) of the Investment Advisers Act of 1940 ("Advisers Act").
Specifically, the order finds that SBFM and CGMI knowingly or
recklessly failed to disclose to the boards of the Affected Funds in
1999 when proposing a new transfer agent arrangement with an
affiliated transfer agent that: First Data Investors Services Group
("First Data"), the Affected Funds' then-existing transfer agent, had
offered to continue as transfer agent and do the same work for
substantially less money than before; and that Citigroup Asset
Management ("CAM"), the Citigroup business unit that includes the
Fund's investment manager and other investment advisory companies, had
entered into a side letter with First Data under which CAM agreed to
recommend the appointment of First Data as sub-transfer agent to the
affiliated transfer agent in exchange, among other things, for a
guarantee by First Data of specified amounts of asset management and
investment banking fees to CAM and CGMI. The order also finds that
SBFM and CGMI willfully violated Section 206(2) of the Advisers Act by
virtue of the omissions discussed above and other misrepresentations
and omissions in the materials provided to the Affected Funds' boards,
including the failure to make clear that the affiliated transfer agent
would earn a high profit for performing limited functions while First
Data continued to perform almost all of the transfer agent functions,
and the suggestion that the proposed arrangement was in the Affected
Funds' best interests and that no viable alternatives existed. SBFM
and CGMI do not admit or deny any wrongdoing or liability. The
settlement does not establish wrongdoing or liability for purposes of
any other proceeding.
The SEC censured SBFM and CGMI and ordered them to cease and
desist from violations of Sections 206(1) and 206(2) of the Advisers
Act. The order requires Citigroup to pay $208.1 million, including
$109 million in disgorgement of profits, $19.1 million in interest,
and a civil money penalty of $80 million. Approximately $24.4 million
has already been paid to the Affected Funds, primarily through fee
waivers. The remaining $183.7 million, including the penalty, will be
paid to the U.S. Treasury and then distributed pursuant to a plan to
be prepared by Citigroup and submitted within 90 days of the entry of
the order for approval by the SEC. The order also requires that
transfer agency fees received from the Affected Funds since December
1, 2004 less certain expenses be placed in escrow and provides that a
portion of such fees may be subsequently distributed in accordance
with the terms of the order.
The order requires SBFM to recommend a new transfer agent contract
to the Affected Fund boards within 180 days of the entry of the order;
if a Citigroup affiliate submits a proposal to serve as transfer agent
or sub-transfer agent, an independent monitor must be engaged at the
expense of SBFM and CGMI to oversee a competitive bidding process.
Under the order, Citigroup must comply with an amended version of a
vendor policy that Citigroup instituted in August 2004. That policy,
as amended, among other things, requires that when requested by a Fund
board, CAM will retain at its own expense an independent consulting
expert to advise and assist the board on the selection of certain
service providers affiliated with Citigroup.
At this time, there is no certainty as to how the proceeds of the
settlement will be distributed, to whom such distributions will be
made, the methodology by which such distribution will be allocated,
and when such distribution will be made. Although there can be no
assurance, Citigroup does not believe that this matter will have a
material adverse effect on the Funds.
The Funds did not implement the transfer agent arrangement
described above and therefore will not receive any portion of the
distributions.
Symbols: EDF, EFL, EHI, EMD, ESD, GFY, HIF, HIX, GDF, IMF, MNP,
MPT, SBF, SBG, SBW, SCD