Deltec bank executive chairman Jean Chalopin told BBC News that Mr Fraser-Smith was the victim of a "tragic accident" at his home in the Lyford Cay area of Nassau.
Franklin traded for his own accounts and that of Lyford Cay, a hedge fund he managed at Bear Stearns whose investors were several senior managers of the firm, according to the SEC.
While he was trading on the information for himself and Lyford Cay fund, a Bear Stearns colleague, Robert Babcock, 33, figured out the trading patterns and began to mimic Franklin's trading for his own account.