Indiana’s Teachers’ Retirement Fund said on Tuesday it fired Putnam Investments as one of its money managers, becoming the latest investor to pull cash from the fifth-largest U.S. mutual fund company amid an improper trading scandal. The $6.4 billion teachers’ fund picked Boston-based Franklin Portfolio to oversee the $60 million in assets that had been managed by Putnam, which has lost at least $32 billion in business after regulators accused it of civil securities fraud.
The Indiana fund claims recent turmoil at the company combined with performance issues are the reasons it removed its money from Putnam. It added that its decision was also influenced by the fact that Justin Scott, a former Putnam fund manager accused of civil securities fraud by Massachusetts regulators, had managed some of the teachers’ retirement money.