Article Abstract:
PBGH Funds decided to remove its co-founders Harold J. Baxter and Gary L. Pilgrim after the firm learned that Pilgrim had invested in a private partnership that participated in frequent in-and-out stock trading, better known as market timing, of PBHG Funds from Mar. 2000 until Dec. 2001. Baxter knew the improper trading was happening. Putnam Investments decided to settle its case with the SEC and agreed to new procedures in mutual fund trading. Other state and federal investigations are still pending.
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Article Abstract:
The Security and Exchange Commission and state regulators have filed civil suits against Putnam Investments and two of its former fund managers, making accusations of fraud in which some large investors were allowed to trade rapidly in and out of mutual funds, in violation of the company's own stated policy. In addition, the suits allege securities fraud, claiming that Putnam did not disclose improper, personal trades made by its managers that harmed public shareholders.
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Article Abstract:
Both employees and mutual fund stockholders in Putnam Investments are not sure that the company is doing everything it can and should do to correct its market timing transgressions that caused financial losses to investors. Putnam is refusing to disclose all of its assets under management. Key employees are fearful of retaliation if they reveal inside information about the company's failure to control unethical business practices
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