Two More Employees Are Leaving PutnamNov 19, 2003 | Bloomberg News
Putnam Investments, the first mutual fund company charged in the state and federal probes of the $7-trillion industry, said Tuesday that two more employees who allegedly had made improper trades were leaving the firm.
James Prusko, who managed the bond portion of the $6.5-billion George Putnam Fund, and Frank Perfetuo, an equities analyst, are departing, the Boston-based unit of Marsh & McLennan Cos. said in a statement.
Putnam spokeswoman Sinead Martin declined to elaborate on the statement.
Putnam ousted former Chief Executive Lawrence J. Lasser two weeks ago after the firm was charged with securities fraud. The Securities and Exchange Commission and Massachusetts regulators alleged that Putnam failed to stop some company insiders from making improper short-term trades in the firm's own funds.
Putnam settled the SEC charges last week without admitting or denying wrongdoing. The Massachusetts charges are pending.
The company previously said that four fund managers who had made frequent trades in their own funds had left or would leave.
The four included Omid Kamshad, who had overseen Putnam's "core" international equity team, and Justin Scott, a former manager on the Putnam Vista Fund.
Kamshad and Scott face charges from the SEC and Massachusetts alleging that their trading violated fiduciary duties to fund shareholders.
Also Tuesday, Merck & Co., the second-largest U.S. drug maker, said it was dropping Putnam from managing part of a $3-billion retirement plan.
Putnam has lost billions of dollars in assets under management since the charges were filed, as pension funds from Iowa to Vermont have fired the firm and individual investors have dumped their mutual funds.
On Monday, the California Public Employees' Retirement System said it had fired Putnam from managing two accounts totaling $1.2 billion.
The change by Merck takes effect Thursday, said spokesman Tony Plohoros, who didn't say how much Putnam managed for the drug company.
"We're extremely concerned about the possibility of wrongdoing by any mutual fund company that manages Merck's savings plan assets," he said. "We're closely monitoring the situation."