Putnam Splits Distribution Operation

June 3, 2004 (PLANSPONSOR.com) - Putnam Investments, the beleaguered Boston mutual fund company at the eye of the storm of the ongoing fund scandal investigation, has announced it is splitting its distribution operation into two pieces including the firm's institutional business.

Charles Haldeman, Putnam’s president and chief executive officer, announced in an internal memo later released by the company that John Boneparth will assume responsibility for Domestic and International Institutional business and International Alliances.

At the same time, Rich Monaghan was tapped as head of Putnam’s Domestic and Offshore Retail Management and Shareholder Communications.

“I want to communicate to you several changes within the Distribution Organization, which reflect Putnam’s evolving business following the challenging period we have faced as a company and in our industry,” Haldeman wrote.

The two men take over for John Brown, currently senior managing director and head of Institutional Management. Haldeman said in the memo that Brown was leaving the company for personal reasons after a seven-year tenure.

Putnam has been heavily entangled in the abusive trading practice investigation that has rocked the mutual fund industry in recent months that has been focused on market timing, late trading, and various sales practices.  In April, the firm agreed to pay $10 million in disgorgement and a $100 million penalty in agreements with the U.S. Securities and Exchange Commission (SEC) and Massachusetts Secretary of State William Galvin to settle charges related to the scandal.  The sum represented the largest penalty yet, relative to actual harm done to customers (See  Details Emerge About Putnam Settlement ).

Further, unlike the other settlements surrounding market-timing and late-trading allegations, the Putnam settlement is the only one as of yet in which the firm admitted guilt.