Western Asset Management Settles SEC Case for $100 Million Penalty

Western Asset Management, part of Franklin Templeton (BEN), will pay a $100 million civil penalty to settle an SEC investigation related to former co-CIO Ken Leech. The SEC found that the firm failed to adequately supervise Leech's trading practices, leading to a 'cherry-picking' scheme. Since the charges in 2024, Western Asset has experienced over $150 billion in long-term net outflows. Franklin Templeton reported $17 billion in long-term net inflows during the second quarter, despite a $4.1 billion outflow from Western Asset. Leech's trial is scheduled to start on June 15, 2026.