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Regulation and Compliance > Federal Regulation > SEC

Putnam and SEC Reach Agreement on Market-Timing Ch

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Nov. 13, 2003 — Putnam Investment Management said it reached an agreement with the Securities and Exchange Commission to settle the market-timing allegations made against the company.

Under terms of the deal, Putnam will institute a number of remedial actions, including new employee trading restrictions, enhanced employee trading compliance, and oversight by an independent third party and the SEC of the calculation of the amount of restitution to be made by Putnam for losses attributable to excessive short-term trading by Putnam employees.

In addition, Putnam will be required to retain an independent compliance consultant, undertake periodic compliance reviews, and have a certification of compliance with the SEC.

The order also contemplates civil monetary penalties to be determined at a later date.

Under the order, the SEC made certain findings of fact and violations, which Putnam neither admitted nor denied.

As reported, Putnam said it lost about $14 billion in assets during the first week of November due to significant withdrawals from shareholders. In connection with the securities fraud allegations, Putnam recently hired Charles E. Haldeman as president and chief executive officer, replacing Lawrence J. Lasser, who will left the company.

Putnam is a subsidiary of Marsh & McLennan (MMC).


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