On May 31, 2005, the SEC instituted settled administrative and cease-and-desist proceedings against Smith Barney Fund Management LLC (the "Adviser") and Citigroup Global Markets, Inc. According to the SEC: "In this case, the Adviser, which serves as investment adviser to the Smith Barney Family of Funds (the 'Funds'), recommended the Funds contract with an affiliate of the Adviser, which would perform limited transfer agent services and sub-contract with the Funds' existing transfer agent. The existing transfer agent would perform almost all of the same services it had performed previously, but at deeply discounted rates, permitting the affiliate of the Adviser to keep most of the discount for itself and make a high profit for performing limited work. In making this recommendation, the Adviser misled the boards by omitting material facts, which led the boards to believe that the Adviser's recommendation was made in the Funds' best interests, which was not true. This self-interested proposal permitted the Adviser and its affiliates to profit from the transfer agent function at the expense of the Funds."

On January 7, 2010, the SEC issued a Notice of Proposed Plan of Distribution and Opportunity for Comment.

On January 7, 2010, the Proposed Plan of Distribution was published (exhibits were inadvertently not attached).

On February 25, 2010, a complete Proposed Plan of Distribution was published.

On April 15, 2010, the SEC issued an Order Approving Plan of Distribution.

On May 12, 2010, the SEC orderd that "the Commission staff shall transfer $110,782,362.95 of the Fair Funds to the custodians for the entitled funds and that these custodians shall distribute such monies, as provided for in the Plan of Distribution."

On September 30, 2011, the SEC ordered that: "the Commission modify the Distribution Plan by directing (i) Legg Mason to arrange for the disbursement of $626,556.96 from the Fair Fund to former shareholders of the Capital Preservation II Fund; and (ii) the return of the money that would have used to reimburse Legg Mason had it properly paid the advancements to the Legg Mason Partners Variable Government Portfolio and the Legg Mason Partners Variable Equity Index Portfolio to the Commission for transmittal to the U.S. Treasury upon termination of the Fair Fund."

On June 30, 2017, the SEC announced a Name Change of Appointed Tax Administrator, and amended the Omnibus Order, beginning June 2017 and for calendar year 2018, to replace all references to Damasco with "Miller Kaplan Arase LLP which acquired Damasco & Associates LLP" in order to reflect Damasco's name change.

According to the SEC: "it is ORDERED that: A. The remaining Fair Fund balance of $89,716,771.99 and any funds returned to the Fair Fund in the future, shall be transferred to the U.S. Treasury; B. The Fund Administrator, Allison Conn, is discharged; and C. The Fair Fund is terminated."