NU Online News Service, Nov. 3, 2003, 5:53 p.m. EST – Marsh & McLennan Companies Inc., New York, has replaced Lawrence Lasser as president and chief executive officer of its Putnam Investments L.L.C. subsidiary.
The move follows recent allegations by the Securities and Exchange Commission and by Massachusetts officials that Putnam permitted illegal market-timed trading by some of its investment managers.
Lasser has been replaced by Charles Haldeman, senior managing director and co-head of investments at Putnam. Haldeman’s investment responsibilities will continue, Marsh says.
Steven Spiegel, who had been senior managing director and chief of global distribution for Putnam, was appointed to the new position of vice chairman of the unit.
Marsh also recalled a former chairman and CEO, A.J.C. Smith, to serve as chairman of Putnam, another newly created position.
Lasser had been the subsidiary’s president and chief executive officer since 1986 and a Marsh director since 1987.
Marsh also appointed Barry Barbash, a partner at the law firm of Shearman & Sterling L.L.P., New York, and former director of the Securities and Exchange Commission’s division of investment management, to conduct an independent review of Putnam’s policies and procedures “to assure that the company operates in accordance with the highest professional and ethical standards,” Marsh says.
Barbash will report directly to Marsh Chairman Jeffrey Greenberg.
“We have previously stated that Putnam will make complete restitution to the Putnam funds for any losses suffered by Putnam shareholders as a result of any improper market-timing activities,” Greenberg says.
Haldeman joined Putnam a year ago from Delaware Investments and Lincoln National Investment Companies, units of the Lincoln National Corp., Philadelphia.
Spiegel was with Lehman Brothers Inc., New York, for 17 years before joining Putnam in 1995.
Smith was chairman of Marsh from 1992 until May 2000, CEO from 1992 until 1999 and president from 1986 to 1992.
Reuters reported Friday that managers of pension plans in Iowa, New York, Pennsylvania and Rhode Island have decided to fire Putnam, taking more than $2.6 billion in assets away from the Boston-based firm.
Before the latest controversy erupted, Putnam was the fifth-largest mutual fund company in the United States.
On Thursday, the Massachusetts state employees’ pension fund said it was pulling $1.7 billion out of Putnam. The Vermont teachers’ pension fund pulled out of Putnam on the same day, according to Reuters.
Figures from Financial Research Corp., Boston, show that as of the end of September, investors had pulled a total of $8.8 billion out of Putnam funds so far this year. In the same period last year, FRC reported a net outflow of $11.6 billion from Putnam funds.
None of that outflow could be attributed to the SEC and Massachusetts investigations, an FRC spokesman points out, because news of fraud investigations of Putnam did not surface until late October.
A Marsh spokeswoman did not immediately return a call seeking comment.