Heading for the Exits

Physician's Money Digest, December15 2003, Volume 10, Issue 23

The widening probe of mutual fundshas led many fund shareholders to jumpship. In the wake of being charged withcivil securities fraud by the SEC andMassachusetts regulators, Putnam Investments,the nation's fifth-largest mutualfund company, has lost more than $21billion in redemptions since the scandalbroke. Putnam ousted its CEO and tookout full-page ads in major newspaperspledging never again to compromise thecompany's integrity. At Strong Financial,where chairman and founder RichardStrong allegedly executed impropertrades, redemptions have totaled morethan $235 million so far. As the probebroadens, other Wall Street heads arerolling. At Alliance Capital Management,the company's chief operating officer andthe chairman of its mutual fund distributionunit have walked the plank.