Four of the nation’s largest public pension funds are going after the board of directors of Putnam Investments’ parent company Marsh & McLennan Companies for its "failure to properly control its money management business and for its severe lack of independent board leadership," the funds announced in a joint statement on Monday.

AFSCME Employees Pension Plan , New York State Common Retirement Fund , California Public Employees' Retirement System and the California State Teachers' Retirement System , which together hold 6.85 million shares, worth $306 million or about 1.3% of the company, are the four involved in the action.

Sean Harrigan, President of CalPERS said the problems at Putnam and MMC are "so severe they are Enron-esque."

"Marsh & McLennan deserves to be the first company in U.S. history to face a binding proxy access proposal because of its gross failure to have proper controls that could have prevented the Putnam disaster," said Gerald W. McEntee, AFSCME Employees Pension Plan Chairman, in a statement.

"It is tragic that the board at Marsh & McLennan lacked the independence needed, and today continues to be influenced more by its insiders than the needs of its shareholders. There is no question that shareholders will support the idea of electing a truly independent director to the board if given the opportunity through our shareholder resolution."

Recently, CalPERS and CalSTRS announced that they had each fired Putnam as their money manager. AFSCME said it has not employed Putnam.

 

 
The quartet said that they intend to use an anticipated Securities and Exchange Commission rule to more easily nominate and elect better leadership on MMC’s board. The funds plan on using shareholder proposals to gain access to the proxy and then nominate and elect directors to the board that are not appointed by the company. However, the rule is not set in stone as of yet and is awaiting SEC approval next month.

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