Don't be surprised if Larry Lasser, the man who was once the highest paid in the fund industry, loses his CEO job at Putnam Investments because of a tip provided by a call-center rep. Though there are no reports out of Putnam parent Marsh & McLennan Companies as of yet that Lasser's job is at risk, speculation about his fate is starting.

Reports are that Lasser was not in the loop on the market timing problems with either the Boilmakers Local #5 retirement plan or the Putnam fund managers. If true, the irony is overwhelming as Lasser is known inside the industry for his tight grip on the reins and his attention to detail.

A Putnam spokesperson did tell the Boston Globe that Lasser "was informed in 2000 that there was an issue in trading in the investment department but that it had already been taken care of."

The implication in that statement is that the matter was settled without input from Lasser. That is a surprise that underscores the seeming lack of concern about the problems that may be at the heart of William Galvin's outrage at the firm.

If Lasser does not put the scandal behind the firm quickly and the fund firm begins to lose business, Lasser's lack of input into the actions taken against the fund managers may also raise red flags with Marsh & McLennan Companies shareholders.

Already there are reports that both the Massachusetts pension fund and the California Public Employees' Retirement System (Calpers) are considering dropping Putnam as a manager in their pension programs. Those two mandates are worth a combined $2.9 billion.

It is likely that these plans represent just the tip of the iceberg. Both plans are cover public employees meaning that they are relatively open about their manager reviews. Most private sector plans, on the other hand, are keeping mum about their plans.

To address these concerns Lasser sent Putnam's institutional clients a letter on Monday, before the civil fraud charges were filed. The letter explained his view of the charges -- Lasser believes the firm's actions were not fraudulent -- and contains an apology for Putnam's failure to put an end to the market timing by Boilermakers plan members.

"In retrospect, had we taken the extreme action of closing the funds... we would have avoided compromising our reputation with you," wrote Lasser.

Lasser also explained the firm's decision to fire the six analysts and fund managers for timing funds. When Putnam first uncovered their trades it allowed each of the six employees to keep both their gains and their jobs. That decision was reversed after Galvin's office and the SEC sent subpoenas to the fund firm.

In explaining the change Lasser noted that "time and standards change, and today we come to a different decision."

While times are indeed different, that excuse may not wash coming from an executive who was paid a total of $133.5 million in cash, bonuses and stock options during the past five years.  

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