Investment Manager Due Diligence

Return to List November 2003* Putnam Investments Since early September, the State Board of Administration (SBA) has been following the investigations into market timing and late trading activity within the mutual fund industry. This activity is part of the SBA duty to monitor Florida Retirement System (FRS) investment managers for both the FRS Investment Plan and FRS Pension Plan. In October, press reports surfaced that Putnam Investments would be charged with two counts of securities fraud by State of Massachusetts regulators and be subject to a regulatory complaint filed by the U.S. Securities & Exchange Commission (SEC). The Massachusetts and SEC charges were filed in late October against Putnam and two former employees, relating largely to improper trading by Putnam portfolio managers within mutual funds that they were responsible for managing. Effective October 29, 2003, two FRS Investment Plan foreign stock portfolios managed by Putnam were placed on the SBA's "Watch List" consistent with the SBA's Investment Manager Monitoring Guidelines. This decision was primarily a result of the pending regulatory litigation and the staff turnover of key investment personnel. *Please note that in providing this information, the SBA is not in any way intending to influence or inform your investment decisions. Also, this list can change at any time without prior notice from the SBA.