SEC Seeks Final Judgment Against Former Western Asset Executive

The Securities and Exchange Commission moved for a final judgment by consent on October 6, 2026, against Stephen Kenneth Leech II, the former co-chief investment officer of Western Asset Management Company LLC. Leech is accused of executing a cherry-picking scheme from January 2021 through October 2023, during which he delayed trade allocations to assign hundreds of millions of dollars in gains to favored portfolios while shifting losses to disfavored ones.

Without admitting the allegations, Leech consented to a $3 million penalty, a permanent injunction against violating federal antifraud laws, and a bar from serving as an officer or director. This action follows a June 2026 settlement where Western Asset paid a $100 million civil penalty to establish a Fair Fund for harmed investors.

In a separate legal matter, Leech pleaded guilty in June 2026 to obstruction of justice charges in the U.S. District Court for the Southern District of New York for providing false testimony to the SEC. His sentencing in that criminal case is expected in the coming weeks.