Kenneth Leech, the former co-chief investment officer of Western Asset Management, was charged with running a $600 million “cherry-picking” scheme, favoring certain clients’ accounts by allocating successful trades to them while giving poorer trades to others.

Between January 2021 and October 2023, Leech allegedly misled investors and made false statements to the SEC.

He faces four fraud charges and one charge of making false statements, as well as related civil charges.

Franklin Resources, which owns WAMCO, was not charged. Leech denies the charges and plans to defend himself, CNBC has reported.

The scandal has led to significant client withdrawals and a drop in Franklin’s stock.

Written by B.C. Begley