Sacramento, Calif. (Nov. 6, 2003) -- After institutional funds in Massachusetts, New York and several other states ended their relationship with Putnam Investments as a result of a trading scandal, California’s gargantuan pension funds -- the California Public Employees Retirement System and the California State Teachers Retirement System -- may sever their ties with Putnam as well.
California state treasurer Phil Angelides called for CalPERS and CalSTRTS to pull out their aggregate $1.5 billion in Putnam investments.
Last week, the Securities and Exchange Commission brought civil fraud charges against the company and two managers, charging that Putnam overlooked a series of rapid or “market timing trades.
Boston-based Putnam has since admitted that six of its employees netted $700,000 in timing trades
Timing trades are designed to buy funds ahead of markups in the values of holdings and to quickly divest them after the fund's price increases.
Two days ago, Putnam parent Marsh & McLennan Cos., ousted Putnam chief Lawrence J. Lasser over the incident.
-- WebCPA staff
