SEC Press Releases·Oct 6, 2026, 4:30 PM ET

SEC Seeks Final Judgment Against Former Western Asset Co-CIO Ken Leech in Cherry Picking Case

SEC moved for court approval of a final judgment against Stephen Kenneth Leech II, former co-chief investment officer of Western Asset Management Company LLC.
Leech allegedly engaged in a cherry-picking scheme from January 2021 through October 2023 by delaying trade allocations to favor specific portfolios with gains while shifting losses to others.
The proposed judgment requires Leech to pay a $3 million penalty, imposes an officer-and-director bar, permanently enjoins him from violating antifraud provisions, and establishes a forthcoming associational bar.
In June 2026, Western Asset Management agreed to a $100 million civil penalty to fund a Fair Fund for harmed investors.
Combined with the Western Asset settlement, court approval of the Leech judgment would return $103 million to affected investors.
Leech pleaded guilty in June 2026 to obstruction of justice charges for providing false testimony to the SEC, with sentencing scheduled for the coming weeks.