Posted on: November 26, 2024 12:10 PM

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Former CIO of global bond investment firm charged with investment adviser fraud

Ken Leech, Former Chief Investment Officer of Western Asset Management, Charged With Fraudulent Scheme to Favor Certain Clients at the Expense of Others.

U.S. Attorney Damian Williams said: “We allege today that S. Kenneth Leech II—the Chief Investment Officer of a significant manager of pension funds and other long-term investments—used his position to cherry pick trades and prop up his favored but failing accounts at the expense of others.  These charges should be a reminder that this Office continues to police all corners of the financial markets and will swiftly hold those accountable who believe that they can cheat and abuse the trust of clients for their own purposes.”

FBI Assistant Director in Charge James E. Dennehy said: “Kenneth Leech, the former CIO of Western Asset Management Company, allegedly violated his fiduciary duty by crafting a preferential treatment scheme to allot more than $600 million in profits and losses to particular clients.

LEECH, 70, of Pasadena, California, is charged with one count of investment adviser fraud and one count of securities fraud, each of which carries a maximum sentence of 20 years in prison; one count of commodity trading adviser fraud and one count commodities fraud, each of which carries a maximum sentence of 10 years in prison; and one count of making false statements, which carries a maximum sentence of five years in prison.

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

From DOJ