Templeton Asset Management, the investment adviser to the Templeton China World Fund and Templeton Dragon Fund, filed a complaint against Harvard Management, which runs the $18 billion Harvard University endowment, Boston, claiming securities law violations. The complaint, filed Wednesday in U.S. District Court in Baltimore, claims Harvard made false or misleading statements in connection with solicitation of proxies from China World Fund shareholders and profited illegally from short-swing trading in the shares of the funds. Last year, Harvard sought shareholder approval in separate actions to terminate the management team of the China World and Dragon Funds. At the time, Templeton charged Harvard with using "pressure tactics" to get the closed-end funds to become open-end. Harvard disputed the charges.
In a statement, Harvard officials called the allegations "baseless. We have acted in accordance with applicable law. Templeton seeks to take away a fundamental right that we have as a shareholder - the ability to vote our shares."