Putnam is continuing to clean house in reaction to operational problems it has uncovered since it first came under investigation last fall. In the latest case, the Boston-based fund firm revealed Thursday that it has made a number of "senior personnel" changes at Putnam Fiduciary Trust in the wake of its discovery that employees circumvented controls in the Putnam Money Market fund.

Some details of the problem were provided in a semi-annual report for the fund filed on Thursday with the SEC.

Putnam did not reveal any identities of those involved, nor were Putnam officials immediately available to comment on the news in the filing.

The fund firm said that it has informed the SEC, bank regulatory authorities, the fund's Trustees and the independent auditors of both Putnam Fiduciary Trust and the fund.

According to the filing, Putnam Management discovered that Putnam Fiduciary Trust Company (PFTC) employees circumvented controls in the fund in 2002. That action led to an inappropriate redemption from an account in the fund to pay certain expenses of PFTC, according to the release.

The fund firm said that it has made restitution to the account; implemented a number of personnel changes, including senior personnel of PFTC; begun to implement changes in procedures to address this issue; and informed the SEC, bank regulatory authorities, the fund's Trustees and independent auditors for each of PFTC and the fund.  

Edited by: Sean Hanna, Editor in Chief


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