New York, Nov 04: Fallout from the mutual fund probe erupted on Monday as the head of one of the nation's biggest fund companies was forced out and securities regulators found more firms may have engaged in improper trading. US regulators also accused nearly 450 brokerage firms of overcharging investors for mutual fund purchases and said tens of million of dollars of refunds may be necessary.

The US Securities and Exchange Commission told lawmakers at a Washington hearing that 10 percent of top mutual fund companies may have been involved in illegal late trading.

Once seen as a safe haven for mom and pop investors, the mutual fund industry has become "the world's largest skimming operation," said Sen. Peter Fitzgerald, chairman of the Senate Subcommittee on Financial Management.
Once seen as a safe haven for mom and pop investors, the mutual fund industry has become "the world's largest skimming operation," said Sen. Peter Fitzgerald, chairman of the Senate Subcommittee on Financial Management.

Lawrence Lasser, who built Putnam Investments into the No. 5 U.S. mutual fund company, became the biggest casualty of the deepening probe into the funds industry when he was ousted by Putnam's corporate parent, the insurance broker Marsh & McLennan Cos. Inc.

The maelstrom on Monday also claimed the chief of the SEC's office in Boston, Juan Marcelino, who will step aside. A Putnam whistle-blower said he was ignored by the agency for months until state regulators took note and moved to filed charges. The SEC and the state of Massachusetts plan to file fraud charges against former Prudential Securities brokers, a spokesman for the state's top securities regulator, Secretary of the Commonwealth William Galvin, said on Monday. Bureau Report