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. Previously, on May 31, 2005, the SEC instituted settled administrative and cease-and-desist proceedings against Smith Barney Fund Management LLC and Citigroup Global Markets Inc.

On January 7, 2010, the SEC published a Proposed Plan of Distribution. Previously, on May 31, 2005, the SEC instituted settled administrative and cease-and-desist proceedings against Smith Barney Fund Management LLC and Citigroup Global Markets Inc. According to the SEC, the proceedings related to "the appointment and operation of an affiliated transfer agent that served the Smith Barney Family of Funds".

On February 25, 2010, the SEC issued a Notice of Proposed Plan of Distribution and Extension of Opportunity for Comment. The SEC noted that: "Because exhibits to the proposed plan were inadvertently not attached to the plan that was published to the Commission's web site, the period for comment on the plan has been extended for an additional 30 days from the date of this notice."

On February 25, 2010, the SEC published a Proposed Plan of Distribution. Previously, on May 31, 2005, the SEC "instituted and simultaneously settled administrative proceedings against Smith Barney Fund Management LLC and Citigroup Global Markets Inc. ... relating to the appointment and operation of an affiliated transfer agent that served the Smith Barney Family of Funds".

On April 15, 2010, the SEC issued an Order Approving Plan of Distribution. The SEC appointed Alison T. Conn, Assistant Regional Director in the SEC's New York Regional Office as Fund Administrator. Previously, on May 31, 2005, the SEC instituted settled administrative and cease-and-desist proceedings against Smith Barney Fund Management LLC and Citigroup Global Markets Inc. The May 31, 2005 SEC Order established a Fair Fund.

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."