Former Putnam Chief Settles "Shelf-Space" Allegations with SEC

January 10, 2007 ( - The former chief of Putnam Investments has agreed to a $75,000 settlement with the Securities and Exchange Commission (SEC), putting an end to allegations that the investment company used mutual fund assets to lure brokerage houses to use Putnam funds, the Associated Press reported.

Daniel Hawke, head of the SECs Philadelphia office, said the settlement resolves an investigation into Putnam’s payments to more than 80 brokers over a three-year period that ended in 2003. The SEC claimed that Lawrence Lasser hid the pay-to-play arrangement from Putnam’s trustees.

The SEC said Lasser must not commit any further securities violations and that he had to pay $75,000 in civil penalties, according to the AP.

The settlement agreement amount was far less than the $50 million paid by Putnam to the SEC in 2005 over alleged payments to brokerage houses (See  Putnam, Citigroup Agree to $60M ‘Shelf Space’ Settlement).Lasser was ousted from Putnam in 2003, amid allegations of improper mutual fund trading (See Details Emerge About Putnam Settlement ), at which point he received a $78-million severance payment from the company.

The news of Lasser’s settlement agreement follows word of Marsh’s decision to sell the money management unit for $3.9 billion to Canadian holding company Power Corp (See MMC Sale of Putnam Could be Good News to Shareholders ).