US Probes How Western Asset Allocated Trades for Client Accounts
- Criminal investigation said to look at ‘cherry-picking’ scheme
- Firm’s veteran investor takes leave of absence amid probes
The US Securities and Exchange Commission headquarters in Washington, DC
Photographer: Samuel Corum/BloombergThis article is for subscribers only.
Federal prosecutors in New York are investigating whether a Western Asset Management executive allocated winning trades to favored accounts, as part of a criminal probe into a practice known as “cherry-picking.”
The probe is being led by the US Attorney’s Office in Manhattan, which is investigating a trading practice that involves allocating lucrative trades to favored clients and less profitable trades to others, according to people familiar with the matter. The US Securities and Exchange Commission is also conducting a separate probe.