Fund Shareholders’ Suits Combined

Shareholders’ lawsuits claiming that Putnam Investments, Janus Capital Group Inc. and five other companies were involved in improper mutual fund trading have been consolidated and assigned to U.S. District Court in Baltimore.

The federal Judicial Panel on Multidistrict Litigation in Washington, which organizes complex federal cases, combined the shareholders’ cases against six mutual fund managers and hedge fund Canary Capital Partners, its website said.

“No district stands out as the geographic focal point of this nationwide litigation,” the panel said. “Thus, we have searched for a district with the capacity and experience to steer this litigation on a prudent course.”

The panel merged 275 suits brought against Putnam, Janus, Canary Capital Partners, Bank of America Corp., Bank One Corp., Strong Capital Management Inc. and Alliance Capital Management. At stake, potentially, are millions of dollars in claims.

Janus, Bank of America, Bank One and Strong were the first four companies accused of improper trading. New York Atty. Gen. Eliot Spitzer said they arranged for select investors, including Canary, to make frequent, short-term trades in their funds at the expense of long-term investors.

None of those four mutual fund companies has been made the subject of an enforcement action by regulators. Canary agreed to pay $40 million to settle Spitzer’s civil complaint against it. Putnam has partially settled a suit brought by the Securities and Exchange Commission. Alliance agreed to settlements with the SEC and Spitzer totaling $600 million, the largest penalties in the investigations of the $7.4-trillion mutual fund industry.

The cases were assigned to three judges including J. Frederick Motz, who is overseeing antitrust cases against Microsoft Corp., the world’s largest software maker. Most of the companies petitioned to have their cases heard in New York.