Two former fund managers at Putnam Investments will pay $1.5 million to settle allegations they improperly traded mutual fund shares, the SEC and Massachusetts announced Monday. Justin Scott and Omid Kamshad neither admitted nor denied the allegations.

Scott is paying disgorgement of $489,439 plus $159,474 in interest and a civil penalty of $400,000, for a total of $1,048,914 to be split evenly between the SEC and the Secretary of State of the Commonwealth of Massachusetts. Scott has also been suspended from working at any investment adviser for 12 months.

Kamshad is paying $57, 157 in disgorgement, plus $13,709 in interest and a civil penalty of $400,000, for a total of $470,866, also to be split between the two regulators. Kamshad has also been suspended for 12 months.

Scott’s attorney, Jack Silvia of Mintz Levin, told the Boston Globe: “Mr. Scott is pleased to have this matter resolved, while Kamshad’s attorney, James J. McGuire called the settlement “the lightest and least Draconian” of any stemming from the mutual fund timing and late-trading scandal.

“We believe the SEC’s offer reflects the strength, or lack thereof, of the case against Mr. Kamshad. Mr. Kamshad is very pleased to put this matter behind him.”

Rather than charging the two with market timing, the SEC characterized their actions as excessive “short-term trading” of mutual funds between 1998 and 2003.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.