SEC Seeks $3 Million Judgment Against Leech

The SEC has asked a federal court to approve a consent judgment requiring former Western Asset Management co-chief investment officer Ken Leech to pay a $3 million penalty in a civil case over alleged cherry-picking of client trades. The SEC says that from 2021 to 2023, Leech delayed allocating trades until after price movements were visible, directing more than $600 million in first-day gains to favored portfolios and a similar amount in losses to others. Leech agreed to the judgment without admitting the allegations; it would also bar him from serving as a public-company officer or director, prohibit future securities fraud, and restrict his association with securities-industry entities. The proposed judgment follows Western Asset’s $100 million SEC settlement and investor fund, bringing the agency’s stated combined relief to $103 million. Leech also pleaded guilty in a separate criminal case related to the investigation, with sentencing expected in the coming weeks.