SEC v. Stephen Kenneth Leech

Stephen Kenneth Leech, the former co-chief investment officer (CIO) of registered investment adviser Western Asset Management Company LLC or WAMCO, allegedly engaged in a multi-year scheme to allocate favorable trades to certain portfolios, while allocating unfavorable trades to other portfolios, a practice known as cherry-picking. According to the complaint, from at least January 2021 through October 2023, Leech placed trades with brokers and then routinely waited until later in the trading day to allocate the trades among clients in the portfolios he managed. As alleged, Leech allocated hundreds of millions of dollars of net first-day gains to favored portfolios, which also benefited Leech personally, and a similar amount of net first-day losses to disfavored portfolios.

Summary generated from official Securities and Exchange Commission press release