(Bloomberg) — Former Western Asset Administration Co. co-Chief Funding Officer Ken Leech was sued by US regulators for participating in an alleged “cherry-picking” scheme to disproportionately allocate higher performing trades to favored portfolios and worse-performing trades to others.
The Securities and Alternate Fee sued Leech in federal courtroom in Manhattan on Monday, alleging that he allotted trades hours after executing them, typically ready till the top of the buying and selling day or afterward, which went towards the agency’s coaching for portfolio managers.
“Within the interim, Leech had the chance to see whether or not the market worth of his trades went up or down,” the SEC mentioned in its criticism. That allowed him to allocate a whole bunch of tens of millions of {dollars} of trades with first-day features to portfolios he favored, whereas sending these with internet first-day losses to ones he didn’t.
Leech was positioned on a go away of absence earlier this yr after Wamco disclosed he had acquired a discover of a attainable enforcement motion from the SEC.
