One of Legg Mason's units has settled with the regulators over improper mutual fund purchases, Dow Jones reports.

Legg Mason Wood Walker Inc. has reportedly agreed to a settlement with regulators according to the company's quarterly report released by the SEC.

The settlement involves $2.3 million in fines and reimbursement to clients who didn't receive breakpoint discounts on front-end sales charges, the filing said.

Under the terms of the agreement, the company will also be required to perform a comprehensive review of purchases by clients of nonproprietary mutual fund Class A shares since Jan. 1, 2001.

Regulators initially proposed the settlment in November but at the time, Legg Mason said it was considering the settlement and didn't expect any reimbursements to clients would be material to its operations.

But today, the company said it expects the SEC and NASD to make a decision on the settlement soon. Meanwhile, Legg Mason has decided to conduct a review of purchases for a longer period than those questioned in the proposed settlement. Also, for the nine months ending December 31, 2003, the said it has accrued $4.3 million for client reimbursements in addition to fines according to its filing. 

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