A headache for the mutual fund industry has developed into a migraine as Putnam Investments and two of its portfolio managers have been accused of market timing their own funds.

Massachusetts regulators and the Securities and Exchange Commission each filed securities fraud charges against the Boston-based fund shop last week, marking the first indictment in the widening market-timing scandal. The move is the latest in a string of allegations against fund firms for trading abuses involving international funds, an effort spearheaded by New York State Attorney General Eliot Spitzer. Under his direction, 88 mutual fund firms have received subpoenas regarding market timing and late trading. Roughly half of those firms admitted to having arrangements with one or more investors allowing them to move nimbly in and out of funds.

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