updated 12/24/2003 11:58:33 AM ET 2003-12-24T16:58:33

Boston-based Putnam Investments, facing state and federal trading abuse charges, has dropped from being the fifth-largest mutual fund company in the country to sixth after investors withdrew $13 billion from the company in November.

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The November outflow, believed to be one of the largest in the investment industry’s history, was more than half of the total $24 billion Putnam has lost so far this year, Financial Research Corp. of Boston reported Tuesday.

Putnam now ranks behind Pacific Investment Management Co. PIMCO runs the nation’s largest bond fund, the $73 billion Total Return fund, and has a total of $138.2 billion in assets in its mutual funds, Financial Research said.

Putnam reported that at the end of November, it had $158 billion in assets in long-term mutual funds, plus an additional $6 billion in short-term or money market funds.

On Nov. 3, Charles “Ed” Haldeman Jr. replaced longtime chief executive Lawrence J. Lasser. On Nov. 13, Putnam reached a partial settlement with the Securities and Exchange Commission in which it agreed to new controls, policies and trading restrictions on employees.

Haldeman told the Boston Herald that the company’s outflows seem to be slowing, although the firm won’t report monthly figures for a few more weeks.

Putnam has been accused of allowing money mangers to rapidly trade in and out of funds they supervised.

In contrast to Putnam’s troubles, the nation’s top 25 mutual fund companies reaped net investment flows of $16.9 billion last month, as investors returned to mutual funds in the wake of improvements in the economy and the stock market, Financial Research said.

Copyright 2003 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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