Mass. Regulator Hires Putnam Whistleblower In Corporate Registry Unit
February 14, 2005
Peter Scannell, the whistleblower who helped take down Putnam Investments, has resurfaced, having secured a job with the securities regulator who first charged the mutual fund company with fraud. Scannell, a former employee at Putnam's call center in Quincy, Mass., initially grabbed headlines when he told William Galvin, Massachusetts secretary of the commonwealth, that Putnam turned a blind eye as more than a dozen union members with retirement accounts at Putnam market timed its funds.
His testimony was a vital step in successfully bringing the first civil fraud charges against a mutual fund for market timing, a lawsuit that ultimately cost the company billions of dollars in lost assets and $100 million in fines. The move also sent shockwaves through the $7.9 trillion industry and emboldened New York Attorney General Eliot Spitzer to pursue similar suits against a number of other major mutual fund houses.
Scannell's information did not come without a price, however. A member of the boilermaker's union, one of the groups timing Putnam funds, allegedly assaulted Scannell with a brick. To date, the assailant has yet to be apprehended.
Scannell claims that he has been blackballed by the industry for his brave decision to turn evidence over to Galvin's office, risking both his career and his life. Scannell, 48, has held a slew of different jobs around the country, including waiting tables and working at a casino. At Putnam, he worked in the back office putting through trades and received a series 7 license. In his new digs, Scannell will work in the corporations division of Galvin's office, where people register their companies, earning $45,000 a year. Scannell could not be reached for comment.