NEW YORK (Reuters) - Franklin Templeton announced on Wednesday that it will shutter a $2 billion fund and that Michael Buchanan will become sole chief investment officer of wholly owned subsidiary Western Asset Management.

The appointment comes after Ken Leech, Western Asset's co-chief investment officer alongside Buchanan, took a leave of absence after receiving a so-called Wells notice from the U.S. Securities and Exchange Commission, according to a statement from Franklin Templeton.

A Wells notice is a formal notification from the SEC that it has concluded an investigation with charges likely to follow.

Franklin Templeton said it will also shutter the $2 billion Macro Opportunities strategy fund after Leech stepped down.

"The company launched an internal investigation into certain past trade allocations involving Treasury derivatives in select Western Asset-managed accounts. The company is also cooperating with parallel government investigations," according to the statement.

Franklin Templeton's shares traded down nearly 12% at $19.93, on track for the biggest daily percent decline since October 2020.