The Ohio trust is seeking to recoup losses sustained in Putnam investments after the firm’s fall from grace in the recent market-timing imbroglio. The sponsor of the state’s CollegeAdvantage 529 plan joined the class-action suit against Putnam in December 2003 (see Ohio to Join Putnam Suit for 529 Plan ).
Ohio Attorney General Jim Petro, announcing the lead plaintiff status, said that clients of the Ohio Tuition Trust Authority were damaged when Putnam allowed some customers to engage in market timing. Petro added Ohio would seek “a fair resolution.”
The Putnam International Equity Fund and Putnam International Capital Opportunities Fund – two offerings affected by the market timing activities – are options in CollegeAdvantage, officials said (see Ohio to Join Putnam Suit for 529 Plan ). At the time the trust entered the lawsuit,Putnam managed 17 CollegeAdvantage investment options and provided recordkeeping and marketing services. In total, CollegeAdvantage assets managed by Putnam were more than $2.8 billion as of October 31, 2003.
The trust said the full extent of the damages will be quantified during the course of litigation.
The Tuition Trust issued a Request for Proposal (RFP) on December 12, 2003 for the provider of low-cost index investment options for CollegeAdvantage, and subsequently tapped Vanguard (see Ohio 529 Tacks On Vanguard Index Funds ).