An Austin American-Statesman news story said Putnam’s request to dismiss the suit by theEmployees Retirement System of Texas is accompanied by the fund company’s demand for $796,096 in unpaid fees plus interest of $162,397. Travis County state District Judge Margaret Cooper revealed her intentions in a letter sent to the parties.
The newspaper said the fund hired Putnam in 2002 to manage part of its international portfolio but sacked the investment company in 2003 after Putnam became ensnared in the mutual fund market timing scandal that rocked Wall Street.
Cooper rejected the retirement system’s damage claim based on the state’s charge that Putnam breached its fiduciary duty; that the fund should recover investment gains it would have earned had other advisers managed the money; and that Putnam should pay the employee fund’s cost of moving the money Putnam had managed to other investment companies.
“We’re very pleased with the result that Judge Cooper got to, but we’re sorry it had to come to this,” Shannon Ratliff, an Austin lawyer who represents Putnam, told the American-Statesman.
Retirement system officials won’t comment on the case because no final order has been issued, said Mary Jane Wardlow, a spokeswoman for the fund. The employee pension fund manages $24 billion in assets for about 205,000 active and retired state employees.