Putnam Is Probed for Fee Rebates

Putnam Investments, the mutual fund firm that was sued for allegedly allowing illegal mutual fund trading, is being investigated by New York Atty. Gen. Eliot Spitzer for possibly giving improper fee rebates to favored clients, the firm said Monday.

The probe also covers the company’s relationships with consultants to retirement plans, said the parent of Boston-based Putnam, Marsh & McLennan Cos., in a quarterly filing with the Securities and Exchange Commission.

Last month, Massachusetts said it was investigating whether Putnam returned so-called 12b-1 fees to retirement plans that invested in the company’s funds at the same time that most investors got no rebates.

Putnam said at that time that the payments it made were a “common, legitimate industry practice” to reimburse retirement plans for administrative expenses out of its own pocket.