Bay State and California Pension Officials Ponder Putnam Firing

October 29, 2003 ( - The potential backlash against Putnam Investments for its involvement in the ongoing mutual fund trading scandal continued to grow with word that Massachusetts and California pension officials may fire the Boston fund company.

According to a Boston Business Journal report, the pension funds are reviewing their contracts with Putnam after the company was charged by state regulators and the US Securities and Exchange Commission with improper mutual fund trading.

Massachusetts is “very disturbed about these allegations,” Ralph White, a member of the state’s Pension Reserves Investment Management Board, which has about $1.8 billion, invested with Putnam, told Bloomberg News.

Putnam, the fifth-largest U.S. mutual fund company, was accused Tuesday of fraud by Massachusetts Secretary of State William Galvin and the SEC for failing to stop two former money managers from trading shares of funds they managed to generate quick profits for themselves at the expense of their customers (See  Putnam Call-Center Rep Says Market-Timing Warnings Were Ignored ).