S pokeswoman Laura McNamara told CBS MarketWatch that the job losses stemmed from a June decision to merge Putnam’s defined contribution plan servicing group with Mercer HR Outsourcing, another Marsh & McLennan company (See Marsh Melds Mercer, Putnam DC Operations ). “We can’t rule out additional staff reductions as we continue to review our business,” McNamara said.
New York State Attorney General Eliot Spitzer last week charged Marsh & McLennan, the world’s largest insurance broker, with bid rigging and illegal payoffs as part of a wider investigation of the insurance industry (See Spitzer Takes On Contingent Commissions ).
More than most fund companies and retirement services providers, Putnam has been in the eye of the storm of the continuing federal/state mutual fund trading scandal that has focused primarily on market timing and late trading practices. Allegations against Putnam have led to the outflow of billions of dollars in client assets.
In April the firm agreed to pay $10 million in disgorgement and a $100 million penalty in agreements with the SEC and Massachusetts Secretary of State William Galvin to settle scandal charges. 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.