Wamco to Pay $100 Million in SEC Settlement Over Leech Trades

Western Asset Management Co. reached a $100 million settlement with the Securities and Exchange Commission to resolve an investigation related to trading practices of its onetime star manager Ken Leech.

“Western Asset did not take reasonable steps to ensure that Leech’s trading practices complied with the firm’s policies and procedures, and failed reasonably to supervise Leech,” the SEC said in a filing on Friday.

Wamco parent Franklin Resources Inc. has sought to move on from Leech, who has pleaded not guilty in a separate Justice Department case. The former co-chief investment officer at Wamco, Leech is charged with steering more than $600 million in gains to favored clients while forcing losses on others. The SEC also filed a fraud case against him which remains ongoing.

Wamco said it agreed to the settlement without admitting any wrongdoing as a business decision that allows it “to put this matter behind it and focus fully on its clients.”

“The DOJ has notified Western Asset that it is no longer a subject of its investigation and will take no further action,” the company said in a filing.

A representative for Leech declined to comment.

Bloomberg News reported earlier that Wamco was nearing an agreement with the SEC to resolve the probe.