Putnam Whistleblower Sues for Rewards

July 5, 2005 (PLANSPONSOR.com) - The man who helped blow the whistle on improper trading at Putnam Investments has taken his battle for a share of the money recovered from Putnam into court.

Peter Scannell, who alerted Massachusetts regulators to the fund trading practices at Boston-based Putnam, sued the state and its attorney general after officials last month turned down his demand for the money under the whistleblower law, according to a Reuters report. Scannell sought $15 million or 30% of the fines that Putnam paid to the state, which his lawyer, Robert Autieri, argued that he qualifies for under the Bay State’s five-year-old whistleblower statute.

Massachusetts Attorney General Tom Reilly’s office said Scannell, a former Putnam call center employee, played an important role in the case but that he does not qualify for the award under the law.

Putnam, the first big mutual fund firm to be charged in an industrywide scandal that cost it billions of dollars in lost assets, agreed to pay $193 million in fines to state and federal regulators and in restitution to investors hurt by the trades (See  Putnam Trustees Approve Outside Study Putting Market Timing Damages at $108.5M ).  Putnam is a unit of insurance broker Marsh & McLennan Cos.