Key facts
- Wamco will pay $100 million to settle SEC charges.
- Charges stem from a $600 million cherry-picking scheme by former CIO Kenneth Leech.
- Wamco did not admit wrongdoing.
- Regulators cited failures in oversight and fair trade allocation practices.
- Kenneth Leech faces a criminal trial.
Western Asset Management (Wamco), a subsidiary of Franklin Resources, has agreed to pay $100 million to resolve charges brought by the Securities and Exchange Commission (SEC). The allegations stem from a scheme involving $600 million in trades, orchestrated by former Chief Investment Officer Kenneth Leech. The SEC cited deficiencies in Wamco's oversight and its practices for allocating trades fairly among its clients. While Wamco has settled with the regulator, it has not admitted any wrongdoing. Kenneth Leech is currently facing a separate criminal trial related to these activities.