Tainted mutual fund Putnam Investments got fired by more pension funds yesterday, raking up $4 billion in lost accounts.
Putnam is at the center of a growing probe on how mutual funds rigged trading in favor of powerful players and against smaller investors.
The latest major pension plan to fire Putnam is Pennsylvania, which is yanking $1 billion in funds. New York, Iowa and Rhode Island said yesterday they also intend to fire Putnam and withdraw funds.
Other pensions that earlier booted Putnam, the nation’s fifth largest mutual fund, include Massachusetts, which pulled $1.7 billion, and Vermont.
Earlier this week, Putnam said the Manhattan U.S. Attorney had subpoenaed its trading documents, raising the possibility of a criminal indictment.
The move caused pension funds to consider taking similar withdrawals. Those states included Florida, Connecticut and Washington.
But some big corporations also may start withdrawing funds. Among Putnam’s big corporate clients are GM, which said it is “monitoring” the situation.