Ten members of a New York trade union reportedly took in more than $2 million in profits from market timing trades made through Putnam Investments, according to The Wall Street Journal.

From July 2000 through January, members of the Boilermakers Union, Local 5 of New York, made 5,340 trades in international and other mutual funds through Putnam as the administrator for their 401(k) retirement plan, the Journal said, citing sources close to the matter.

Massachusetts securities regulators are currently investigating Putnam for allowing preferred clients to move quickly in and out of mutual funds to take advantage of stale prices, particularly price discrepancies involving overseas funds. The problem with market timing is that it often has an adverse effect on a fund’s long-term shareholders in that it dilutes the value of its overall holdings.

The union workers traded roughly $657 million of fund shares during the 30-month period, according to a document provided to the Massachusetts Securities Division. The trades were primarily done through the firm’s Putnam International Voyager Fund, which has recently been renamed Putnam International Capital Opportunities Fund.

Richard Martin, the boilermaker who reaped the biggest gains, made 542 trades to the tune of $226 million, the document revealed. The document also showed that his account grew from $525,000 to nearly $1.5 million during that period with an unrealized capital gain upwards of $886,000. Although these trading practices are not illegal for the laborers, Putnam could find itself in more hot water if their prospectuses say it discourages rapid trading in its funds.

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