Cleary Gottlieb and Morvillo Abramowitz Secure Favorable Plea Agreement for the Former Co-Chief Investment Officer of Western Asset Management Company

In November 2024, the U.S. Attorney’s Office for the Southern District of New York brought a five-count indictment charging our client, S. Kenneth Leech II, with securities fraud, investment adviser fraud, commodity trading adviser fraud, and commodities fraud in connection with an alleged $600 million “cherry-picking” scheme that the government claimed extended from January 2021 through October 2023.

The core of the government’s allegations was that Ken, the former Co-Chief Investment Officer of Western Asset Management Company, dishonestly favored one set of clients and accounts over another set of clients and accounts by allocating trades based on their first day performance. The indictment also charged Ken with one count of having made false statements during testimony he gave to the U.S. Securities and Exchange Commission. If convicted of all counts, Ken would have faced 65 years of imprisonment.

On June 12, 2026, after over a year and a half of litigation and after jury selection had begun, the U.S. Attorney’s Office agreed to accept a guilty plea to one count of obstructing a SEC proceeding. As part of the plea agreement, the U.S. Attorney’s Office agreed to drop all of the cherry-picking fraud charges initially alleged against Ken. Under the plea agreement, the government agreed that the applicable sentencing guidelines are in the range of six to twelve months in prison.

Ken is scheduled to be sentenced in September 2026.

The Cleary Gottlieb team includes partner Joon Kim and associates Mitchell Kohles, Tara Aida, Cayanne Chachati, and Joie Goodman.

The Morvillo Abramowitz team includes partners Jonathan Sack and Jeremy Temkin, counsel Joshua Bussen, and associates Samuel Magaram, Marissa Piccolo, David Richards, and Nathaniel Sobel.