Updated
Updated · Reuters · Jun 5
Wamco Agrees to Pay $100 Million SEC Fine Over Alleged Cherry-Picking Scheme
Updated
Updated · Reuters · Jun 5

Wamco Agrees to Pay $100 Million SEC Fine Over Alleged Cherry-Picking Scheme

3 articles · Updated · Reuters · Jun 5

Summary

  • $100 million is the civil penalty Western Asset Management Co will pay to settle SEC charges tied to an alleged cherry-picking scheme involving former co-CIO Kenneth Leech.
  • Franklin Resources said Wamco made the deal as a business decision to avoid prolonged litigation, and the settlement closes investigations by both the SEC and the U.S. Department of Justice.
  • Wamco did not admit wrongdoing in the settlement, while Leech has pleaded not guilty to related criminal charges in New York.

Insights

If the company settled for $100 million, why does the executive accused of the scheme get to plead not guilty?
Is a $100 million fine a real deterrent or just a business cost for a firm managing billions in assets?
With new SEC and DOJ fraud units, are asset managers entering a new era of intense regulatory scrutiny?