DOJ v. Leech

S. KENNETH LEECH II allegedly pled guilty to obstructing justice by giving false and misleading testimony to the United States Securities and Exchange Commission ("SEC") in connection with an investigation into his fraudulent scheme to favor certain clients at the expense of others. LEECH appears to have committed fraud and abused the trust placed in him by clients of WAMCO between 2021 and October 2023, by engaging in a criminal scheme commonly known as cherry-picking to compensate for losses in his marquee investment strategy. This involved assigning trades that performed well during their first day into client accounts associated with that investment strategy, and assigning trades that performed poorly over their first day into the accounts of other clients. LEECH's victims may have included institutional and retail investors. Over the course of his alleged criminal scheme, LEECH allocated trades with net first-day gains of at least approximately $600 million to his favored strategy and clients, and allocated trades with net first-day losses of at least approximately $600 million to strategies and clients to whom he owed an equal fiduciary duty. In an effort to obstruct the investigation, LEECH testified before the SEC that he knew where he planned to allocate trades at the time he placed them, which appears to have been false.

Summary generated from official Department of Justice press release