The US Department of Justice is dropping most of its charges against S. Kenneth Leech II, the former co-chief investment officer of Western Asset Management Company, in a case that has already cost the firm more than $150 billion in client outflows.
Leech was originally indicted in November 2024 on multiple counts of securities fraud tied to what prosecutors described as a years-long “cherry-picking” scheme.
The scheme that triggered the collapse
Prosecutors alleged Leech did between January 2021 and October 2023. Over that period, the scheme reportedly funneled more than $600 million in gains toward preferred portfolios. Non-favored clients absorbed a roughly equal amount in losses.
The DOJ’s Southern District of New York unsealed its indictment against Leech on November 25, 2024, charging him with multiple counts of fraud. Leech had already been placed on leave from Western Asset back in August 2024, before the formal charges landed.
