It appears Franklin Resources ( BEN) may catch at least one break in the mutual fund investigation.

In a regulatory filing, the San Francisco-based fund company said the Securities and Exchange Commission "no longer intends to recommend" filing civil charges against Gregory Johnson, the company's president and co-chief executive.

Several weeks ago, Franklin, which manages the popular Franklin/Templeton family of funds, said the SEC was preparing to file civil charges against Johnson, as well as against the firm. The company has said the SEC staff believes it has found evidence of improper trading in some of Franklin's funds.

In the filing, Franklin offered no explanation for the SEC's change of heart about charging Johnson. The company said it's still talking to the SEC about a possible resolution of the investigation.

Last month, Massachusetts securities regulators charged the parent company of the Franklin/Templeton funds with fraud in a market-timing scheme involving Las Vegas investor Daniel Calugar, who has emerged as one of the central players in the mutual fund trading scandal.

In December, the SEC charged the former tax attorney with generating $175 million in profit from making improper trades in funds managed by Alliance Capital ( AC) and Massachusetts Financial Services, a division of Sun Life Financial ( SLF).

Massachusetts regulators said Franklin executives, including William Post and several mutual fund managers, struck a deal with Calugar to let him frequently trade shares of a fund in return for investing $10 million in company hedge funds. Post, president of the Northern California offices of Templeton/Franklin Investment Services, was placed on administrative leave by the company late last year and has since left the firm.

Market-timing is the term for a legal but frowned-upon trading strategy in which mutual fund shares are bought and sold frequently in order to profit from price differences in different markets. It's harmful for the vast majority of mutual fund investors because it can dilute the value of a fund by driving up trading and administrative costs.

Most fund companies say they try to ferret out and stop market-timers. But investigators looking into improper trading practices in the $7 trillion mutual fund industry have found that many fund companies were willing to bend or ignore those rules when it came to a privileged group of hedge funds and their brokers.

Franklin is also is being investigated by federal prosecutors in Northern California and state regulators in New York, Florida and California.