Ken Leech, the 71-year-old former co-chief investment officer at Western Asset Management Co., pleaded guilty on June 12 in Manhattan federal court to obstructing an SEC investigation. The plea came just three days before Leech was set to stand trial on far more serious charges, including securities fraud and investment adviser fraud.

Western Asset Management, known as WAMCO, managed roughly $229 billion in assets as of March 2026. Leech was one of the people running the show at one of the largest fixed-income managers on the planet.

The cherry-picking scheme

From January 2021 through October 2023, Leech allegedly ran what regulators call a “cherry-picking” scheme. That meant allocating more than $600 million in favorable bond trades to preferred client portfolios. Over $600 million in unfavorable trades got dumped onto disfavored clients.

The total impact of Leech’s alleged trade allocation malpractice came to approximately $1.2 billion in combined gains and losses. The original charges against Leech, which included securities fraud, were unsealed on November 25, 2024. During the SEC’s investigation, Leech provided what prosecutors described as false testimony about his trade allocation practices, specifically during testimony on March 6, 2024.

WAMCO’s $100 million settlement

In early June 2026, WAMCO settled SEC charges by writing a check for $100 million in civil penalties. The firm did not admit any wrongdoing as part of that settlement. Following the settlement, the Department of Justice issued a declination, deciding not to pursue additional criminal action against the firm.

The $100 million penalty represents less than 0.05% of WAMCO’s total assets under management. For context, that ratio is roughly equivalent to someone with a $500,000 portfolio paying a $220 fine.

Leech’s guilty plea on the obstruction charge effectively canceled the trial that had been scheduled for June 15, 2026.