Peter Scannell, a whistleblower that cost Putnam Investments $193.5 million in state and federal settlement charges for alleged market timing, on Tuesday, was denied a $15 million reward sought by the former call-center operator in Quincy, Massachusetts, the Boston Herald reports.
David R. Kerrigan, Attorney General Tom Reilly's government bureau chief, praised Scannell's assistance in uncovering wrongdoing at the Boston mutual fund giant, but ruled that he does not meet the law's requirements of a whistleblower. Therefore, he is not eligible for the 30% compensation of Putnam's fines to the state of Massachusetts, outlined under the state's False Claims Act.
Scannell first reported evidence of market timing to the Securities and Exchange Commission, which failed to act, and then to Secretary of State William Galvin and his securities division chief Matt Nestor, who proceeded with the allegations. In addition to Putnam's fines paid in the settlements, Scannell's tip resulted in the ouster of the company's CEO Lawrence "Larry" Lasser.
In his view, Scannell paid dearly for being an informant in the Putnam case, having been assaulted with a brick by an assailant urging him to keep his mouth shut. Further, he claims that he has been blackballed in the industry and the whole ordeal has caused him physical, emotional and financial harm.
Unlikely to give up, Scannell plans to appeal to the Superior Court, according to the Herald. "The attorney general has his point of view. But the courts have the ultimate authority in interpreting the statute and applying it in this specific case," said Scannell's lawyer Robert C. Autieri.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.