U.S. officials charged former Western Asset Management Co. co-chief investment officer Kenneth Leech on Monday with operating a fraudulent “cherry-picking” scheme in which he unfairly gave preference to certain customers’ accounts over others when allocating transactions.
Between January 2021 and October 2023, Leech disproportionately assigned better-performing transactions to preferred portfolios and worse-performing trades to other portfolios, according to the U.S. Securities and Exchange Commission.
According to the SEC, Leech is also facing similar criminal allegations from the Manhattan office of the U.S. Attorney.
Requests for comment were not immediately answered by Leech’s attorneys. A comparable request was not quickly answered by the U.S. attorney’s office.
Wamco, also known as Western Asset Management, is a division of Franklin Resources, which purchased the company in 2020 when it bought Legg Mason.
Following Franklin’s announcement that authorities were looking into Leech, Wamco has seen tens of billions of dollars in withdrawals from customers in recent months.
