Trading Abuse at Putnam Leads to Big Loss for Investors
Investors have lost nearly $100 million due to mutual fund trading abuses at Putnam Investments, a consultant figured out.
“An independent consultant is probing the matter and it appears that the number is in the $100 million range,” said Brian McNiff, a spokesman for Secretary of the Commonwealth William Galvin.
Putnam itself has not commented on the amount because the consultant is not finished with his work.
A Reuters article explains:
“Boston-based Putnam, the eight-largest U.S. fund company, was the first high-profile firm to be charged with securities fraud by Galvin’s office in 2003 when it became clear that Putnam executives failed to enforce in-house trading rules.
A handful of former portfolio managers and about three dozen other employees engaged in market timing — the fast-paced buying and selling of shares — in Putnam’s funds.
Putnam, the money management unit of insurance broker Marsh & McLennan Cos., discouraged market-timing because it can hurt long-term fund investors by eroding a fund’s value.”
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