Former Western Asset CIO Ken Leech Settles SEC Case
(Bloomberg) — Ken Leech, the former co-chief investment officer at Western Asset Management Co., agreed to pay $3 million to settle a US Securities and Exchange Commission lawsuit claiming he’d cherry picked winning trades.
Leech agreed to the penalty without admitting SEC allegations that he’d fraudulently steered more than $600 million in gains to favored clients while forcing losses on others, according to a court filing Tuesday. The settlement must be approved by a judge. An attorney for Leech declined to comment.
“The conduct by Leech and Western Asset was an egregious breach of fiduciary obligations to their clients,” Brent Wilner, associate director of the SEC’s Los Angeles Regional Office, said in a statement.
In June, Wamco agreed to pay $100 million to settle SEC claims that it failed to detect and prevent Leech’s trading patterns and to set up a fund to distribute money to disfavored investors. Wamco didn’t admit to the SEC’s findings. It said at the time the settlement allowed the firm “to put this matter behind it and focus fully on its clients.”
In a separate case, Leech pleaded guilty in June to lying to SEC investigators during the regulator’s investigation into his trading. Sentencing in that criminal case is expected in the coming weeks, the SEC said.
