Franklin Resources’ Wamco Hit with $100 Million SEC Fine

Western Asset Management, a division of Franklin Resources, has agreed to pay $100 million to resolve charges from the Securities and Exchange Commission (SEC) related to a $600 million cherry-picking scandal involving its former Chief Investment Officer, Kenneth Leech. While the firm has settled the charges, it did not acknowledge any wrongdoing in the process.

Leech is now facing a criminal trial, as regulators pointed to significant lapses in the firm’s oversight and trade allocation practices, which allowed the misconduct to occur. The case underscores the importance of rigorous compliance measures in the investment management industry.