Report: Putnam largely did good job policing improper trading

<br>BOSTON (AP) _ Putnam Investments largely did a good job of policing improper trading despite some shortcomings, according to a six-month internal investigation. <br><br>However, Putnam executives did

Tuesday, March 23rd 2004, 12:00 am

By: News On 6

BOSTON (AP) _ Putnam Investments largely did a good job of policing improper trading despite some shortcomings, according to a six-month internal investigation.

However, Putnam executives did not regard improper trading by several portfolio managers as serious misconduct, and the firm was slow to stop excessive trading by a handful of outside investors, the probe found.

The investigation, by independent trustees of the company's mutual funds, are similar to the results of an internal investigation by Putnam's management, led by new chief executive Charles ``Ed'' Haldeman Jr., conducted over the winter.

Haldeman's probe led to the firing of nine more employees for improper trading; six investment professionals earlier had been fired.

John A. Hill, chairman of the board of trustees, said the failure of top management to reveal improper trades by employees was the largest disappointment of the scandals that have rocked the mutual fund company, the nation's sixth-largest.

Putnam has reached a partial settlement with the Securities and Exchange Commission, but still faces fraud allegations from Massachusetts regulators.

Secretary of State William F. Galvin said the trustees' report, which was to be formally released Tuesday, sheds little new light on events at Putnam.

Galvin said the trustees' authority as an independent body ``seems to be a new adventure for them. We don't know what their track record is, as far as being independent, so we'll have to wait and see.''

Putnam, a unit of Marsh & McLennan Cos., was the first investment firm formally accused of wrongdoing in the now-widespread scandal over improper market-timing trades. As of Dec. 31, Putnam managed about $240 billion in assets.