Western Asset Pays $100 Million to Resolve Federal Charges Tied to former Co-CIO

Federal regulators said the firm failed to detect and prevent alleged ‘cherry-picking’ by the former co-chief investment officer.

The seal of the U.S. Securities and Exchange Commission (SEC) is seen at their headquarters in Washington on May 12, 2021. Andrew Kelly/Reuters

Western Asset Management Co. will pay a $100 million civil penalty to resolve federal charges tied to an alleged “cherry-picking” scheme involving its former co-chief investment officer Kenneth Leech.

In a filing with the U.S. Securities and Exchange Commission (SEC) on Friday, Western Asset’s parent Franklin Resources said the firm agreed to the settlement as a “business decision” to avoid prolonged litigation.