Massachusetts securities regulators have subpoenaed Putnam Investments as part of a widening probe of market timing and possible other improper mutual fund trading activity, The Boston Globe reported on Tuesday.

Putnam Spokesperson Nancy Fisher confirmed the company had received and was responding to a request from Massachusetts.

The Massachusetts Securities Division asked Putnam for information about trading in the firm’s International Capital Opportunities Fund, and the request focused on trading between January and September 2000, the Globe article said.

About 12 people have personally been asked to provide information to the office of Secretary of the Commonwealth William Galvin, the paper said.

Market timing involves selling shares late in the day and reselling them the following morning. The method is usually used by big shareholders, often to the detriment of smaller investors.

Fisher declined to comment specifically on Galvin’s remark to the Globe that there was “probable cause to believe there are significant problems” at Putnam.

However, she noted that the company has had a policy since 1997 to protect its funds from excessive trading activity and market timing.

“Our controls include short-term trading fees and fair value pricing along with daily monitoring of trading activity within our funds,” she told Reuters. “As a result of these controls we have revoked trading privileges of those who have violated the policy.”

The Massachusetts probe is related to similar state and federal probes into after-hours trading and market timing, which regulators say has cost long-term investors billions of dollars by diluting the value of their funds.

Copyright 2012 Thomson Reuters. Click for restrictions.

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