Kenneth Leech, the former co-chief investment officer of Western Asset Management Co, was charged by U.S. authorities on Monday with running a fraudulent \u201ccherry-picking\u201d scheme where he improperly favored some clients\u2019 accounts over others when allocating trades.<\/p>\n\n\n\n
The U.S. Securities and Exchange Commission said that between January 2021 and October 2023, Leech disproportionately allocated better performing trades to favored portfolios, and worse performing trades to other portfolios.<\/p>\n\n\n\n
Leech also faces related criminal charges from the U.S. Attorney\u2019s office in Manhattan, the SEC said.<\/p>\n\n\n\n
Lawyers for Leech did not immediately respond to requests for comment. The U.S. attorney\u2019s office did not immediately respond to a similar request.<\/p>\n\n\n\n
Western Asset Management, known as Wamco, is part of Franklin Resources, which acquired the business through its purchase of Legg Mason in 2020.<\/p>\n\n\n\n
Clients have pulled tens of billions of dollars from Wamco in the last few months, after Franklin announced that authorities were investigating Leech.<\/p>\n\n\n\n