Regulators May Charge Putnam Soon

Federal and state regulators were expected to file charges, possibly as early as today, in probes of mutual fund group Putnam Investments and some of its executives, sources familiar with the matter said Monday.

A Securities and Exchange Commission investigation of Boston-based Putnam has focused chiefly on questionable market-timing trades by Putnam managers in shares of their company’s own mutual funds, the sources said.

The SEC has found evidence of in-house timing trades at numerous fund companies and was expected to bring further legal action in the weeks ahead, the sources said.

A spokesman for Massachusetts Secretary of State William Galvin said Monday that the state’s top securities regulator would file civil charges today against an unnamed investment management company for violating state securities laws.

A spokeswoman for Putnam, the fifth-largest U.S. fund company and a unit of insurance broker Marsh & McLennan Cos., declined to comment Monday.

An SEC spokesman also declined to comment, citing the agency’s policy against discussing enforcement matters.

Putnam said last week that it was ousting four managers for improper trading.

It said it discovered in 2000 that managers had done timing trades in some of its global and international funds’ shares with an eye to profiting from stale price data.

Market timing can be illegal if a fund company publicly bans it but then lets selected individuals engage in it.

The SEC and New York Atty. Gen. Eliot Spitzer have been probing trading and brokerage issues concerning mutual funds for many months. The probes have centered principally on two practices: market timing and late trading.