Western Asset Management Company just got hit with one of the more expensive compliance failures in recent memory. The SEC ordered the firm to pay a $100 million civil penalty for failing to prevent misconduct by its former co-chief investment officer, Kenneth “Ken” Leech II.
The penalty, announced on June 5, 2026, stems from what the SEC described as a cherry-picking scheme that ran from January 2021 through October 2023.
What actually happened
In this case, the SEC found that Leech’s conduct harmed investors in Western Asset’s Core and Core Plus strategies. The $100 million penalty will be distributed through a Fair Fund specifically designed to compensate those affected investors.
Western Asset, a subsidiary of Franklin Templeton, neither admitted to nor denied the SEC’s findings. The firm agreed to a censure and a cease-and-desist order on top of the financial penalty.
