(Bloomberg) -- Money managers that used Western Asset Management Co. to help invest their bond portfolios are being pressed about their dealings with the...
-- Money managers that used Western Asset Management Co. to help invest their bond portfolios are being pressed about their dealings with the firm, as US authorities ramp up their investigation of how once-star trader Ken Leech allocated winning bets. Fidelity Investments and SEI Investments Co. are among the firms that received information requests from federal prosecutors in recent months, according to people familiar with the inquiries.
US authorities are examining whether Leech parceled out winning trades to favored clients at the expense of others — a practice known as cherry-picking. Investors have pulled billions of dollars from Wamco funds since the firm disclosed criminal and civil investigations earlier this year. Leech took a leave of absence as co-chief investment officer in August after the Securities and Exchange Commission warned he could face a potential enforcement action.
A representative for Leech didn’t respond to requests for comment. Wamco declined to comment. Representatives for the US Attorney’s Office for the Southern District of New York and the SEC declined to comment, as did spokespeople for Fidelity and SEI Investments. Pasadena, California-based Wamco, which is owned by Franklin Resources Inc., has previously said it’s cooperating with the SEC and DOJ after launching its own investigation into about 17,000 trades made by Leech over three years. The transactions were spread across 38 accounts and three strategies, Bloomberg previously reported.
Bloomberg Wamco Federal Prosecutors Institutional Investors Money Managers Investment Firms Western Asset Management Co. Leech Russell Investments SEI Investments
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