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Putnam Fires More Execs

Dec 16, 2003 | Wall Street Journal

Putnam Investments said it fired nine more employees after completing a review of the fund-share trading activity of all Putnam employees dating back to January 1998.

Putnam Chief Executive Charles "Ed" Haldeman said in a letter released Tuesday that the Boston firm had completed its review of all employee trading activity from January 1998 to October 2003, and it terminated nine current employees "who we believe knowingly engaged in improper trading in Putnam funds."

The nine canned employees were in addition to six portfolio managers the firm had previously let go. None of the nine previously managed money at Putnam.

Mr. Haldeman said other employees who engaged in improper trading were "strongly admonished," but weren't fired because they were either not up to speed on Putnam's policies or they were told to stop and they did.

Mr. Haldeman said that six former employees of Putnam Investment Management Inc., including five who were not fired because they had already left the company, "operated in a coordinated manner to engage in improper trading activity."

"Information we have gathered about this behavior has been turned over to federal and state regulators, for whatever action they deem appropriate," he added.

The CEO also said most of the improper trading activity took place between 1998 and 2000, and occurred predominately in the firm's global and international funds.

Putnam didn't have any agreements to allow market timing or late trading by its clients, the executive said.

Mr. Haldeman also said the cost of any improper trading in Putnam fund shares will be calculated by an independent consultant, approved by the Securities and Exchange Commission and fund trustees, and "full restitution will be made to fund shareholders in the most timely manner possible."

At least two other independent reviews of Putnam are continuing.

AMG Data, which tracks mutual-fund flows, said it estimates outflows from Putnam's funds in November measured $13.2 billion.

Marsh & McLennan Cos. (MMC) is the parent of Putnam Investments.

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