Former Western Asset Management investments chief pleads guilty

Former Western Asset Management co-chief investment officer Ken Leech pleaded guilty to obstructing an investigation into a fraudulent trading scheme that disadvantaged certain clients.

- Karren Vergara

At the US Attorney's Office for the Southern District of New York, Leech admitted to providing false and misleading testimony to the Securities and Exchange Commission (SEC), which was investigating his alleged favouritism to certain strategies and clients.

Authorities estimate that Leech allocated trades with first-day gains of about US$600 million to preferred strategies, while assigning roughly the same amount in first-day losses to other client accounts, despite owing a fiduciary duty to all investors.

Leech's conduct affected both institutional and retail clients, including those relying on him to manage savings and pension plans.