Although Putnam Investments had numerous stopgap measures to prevent market timing, it failed to establish a way to detect it in individual accounts within omnibus brokerage accounts or at the participant level in 401(k) plans. The nation’s fifth-largest mutual fund company also was aware that two of its chief investment officers were guilty of market timing as long as five years ago – yet it did nothing immediately to stop them. Nor did it order them to return the $700,000 in profits they had made.

This was the linchpin of Federal and state regulators’ securities fraud and civil charges Tuesday against the firm and two of its executives, Omid Kamshad and Justin M. Scott.

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