Compliance August 20, 2008

Putnam Begins Payouts for Market-Timing Settlement

Putnam Investment Management, LLC, will pay the first distribution of $40 million to compensate its mutual fund investors affected by undisclosed market timing and excessive short-term trading.
Reported by

According to the Securities and Exchange Commission (SEC), the payment is the first in a series of Fair Fund distributions totaling more than $150 million to more than 1.5 million Putnam mutual fund investors. The first payment will reach 600,000 investors.

When the market-time scandal was unveiled in 2003, the SEC and the Massachusetts Securities Division brought separate administrative proceedings against Putnam (see Market Timing Leads to “Late” Departure of Putnam Fund Managers). As part of an April 2004 settlement, Putnam agreed to pay disgorgement and financial penalties and to implement certain compliance measures, mutual fund governance steps, and employee trading reforms. The Fair Fund distribution is composed of money that Putnam paid to settle both the SEC and Massachusetts actions, according to the SEC.

More information Fair Fund distribution and the Putnam settlement is available at www.putnam.com/individual/fair_fund/.

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