Putnam managers to settle with SEC

Two former Putnam Investments portfolio managers have agreed to pay $1.5 million to settle claims that they made mutual fund trades that could hurt clients.

Justin Scott will pay $1.05 million and Omid Kamshad will pay $470,866 to settle civil fraud claims filed by the Securities and Exchange Commission and Massachusetts regulators, the SEC said Monday.

Scott and Kamshad neither admitted nor denied wrongdoing in agreeing to settle. They are barred from working for an investment advisor for a year.

The complaints filed against them in 2003 were among the first in a U.S. regulatory crackdown on trading abuses in the $10.8-trillion mutual fund industry.

Regulators said the men used inside knowledge about funds they managed to generate quick profits for themselves that may have come at the expense of customers.

In 2004, Putnam agreed to pay $110 million to settle related claims that it failed to disclose improper trading by money managers.

Boston-based Putnam is being sold by insurer Marsh & McLennan Cos. to the Lifeco Co. insurance unit of Montreal-based Power Financial Corp.