Charles Haldeman, 55, Putnam's co-head of investments, will replace him, Marsh & McLennan Cos., Putnam's parent, said in a statement. Lasser, 60, who was paid $163 million during the past six years, will leave the Boston-based company immediately, six days after Putnam and two former money managers were charged with improper short-term mutual fund trading.

Lasser is the highest-ranking executive to lose his job in the widening investigation of the $7.1 trillion fund industry. Strong Capital Management Inc. yesterday said founder Richard Strong has stepped down as chairman of its mutual funds group. More than 30 people have been suspended or fired since New York Attorney General Eliot Spitzer initiated the probe in September.

``This is a move they had to make,'' said Wayne Bopp, who helps manage $31 billion at Fifth Third Bancorp in Cincinnati, which holds about 3 million shares of Marsh & McLennan after trimming its stake during the past two weeks.

Since the allegations of short-term trading by Putnam managers emerged on Oct. 28, pension clients including state funds in Massachusetts and Iowa have withdrawn more than $4 billion from Putnam. Lasser, who joined Putnam in 1969 as an analyst, hasn't returned calls to his home and office.

``With all that we know now, we're happy that things will get better from here,'' Bopp said.

Shares of Marsh & McLennan, which have lost 14 percent since Massachusetts announced its investigation on Sept. 16, were up 85 cents at $43.60 in New York Stock Exchange composite trading at 9:38 a.m. local time.

Management Changes

As part of a management overhaul, Marsh & McLennan said Steven Spiegel, 58, Putman's senior managing director, will be vice chairman, and A.J.C. Smith, 69, Marsh & McLennan's former chairman and CEO, will be chairman of Putnam.

New York-based Marsh & McLennan also said Barry Barbash, the former chief mutual fund watchdog at the Securities and Exchange Commission, will conduct an independent review of Putnam's policies and controls.

``This is a step in the right direction,'' said Jeff Thompson, an analyst at Keefe Bruyette & Woods in Hartford, Connecticut, who has a ``market perform'' rating on Marsh & McLennan and holds no shares of the company. ``It's still going to take a while to get things back on track,'' he said.

Tarnished Image

Haldeman came to Putnam last October from Lincoln National Cos., where he was president and CEO of the company's Delaware Investments unit. A graduate of Dartmouth College with degrees from Harvard Business School and Harvard Law School, Haldeman has worked in the investment business for almost 30 years.

Marsh & McLennan Chairman Jeffrey Greenberg apologized to investors for the improper trading at Putnam in a statement. ``The kind of conduct that has occurred has no place at Putnam,'' he said.

Under Lasser, assets at Putnam rose to as much as $422 billion in March 2000 at the peak of the Internet and technology- led stock market rally from $20 billion when he took over in 1985. The company oversaw $272 billion for clients at the end of September.

The fraud charges have tarnished one of the oldest names in the fund business. Putnam was started in 1937 by a descendent of Massachusetts Supreme Court Justice Samuel Putnam, whose 1830 ruling that funds in trust should be managed from the perspective of a ``prudent man'' helped create the basis for the industry.

Lasser's Letter

A day before the fraud charges were filed on Oct. 28, Lasser apologized to customers in a two-page letter. Four managers, including the head of international equities, and a retirement plan had made short-term trades contrary to Putnam policies, Lasser said. The managers were replaced, creating turmoil on the investing team that gave investors another reason to depart.

``While we strongly believe that our actions weren't fraudulent, we recognize the public perception of the facts and the damage to our reputation,'' he wrote.

The alleged wrongdoing at Putnam marks the third time since 1998 that Lasser had to dismiss employees and say he was sorry for investing mistakes.

From 2000 to 2002, the company's stock funds ranked third worst among the 25 biggest companies tracked by researchers at Kanon Bloch Carre in Boston. The sub-par performance was caused by Putnam's overweighted investments in technology stocks contrary to prospectuses that said the funds were diversified.

Putnam's Vista fund prospectus in late 1999 said ``because the fund invests across many sectors, it is less dependent on any single industry or stock, which may reduce risk.'' At the time, more than half the fund was invested in two industries -- technology and telecommunications.

Changing Managers

After performance dipped, Lasser replaced head of investments Tim Ferguson in October 2002 with Steve Oristaglio, one of Ferguson's deputies, and Haldeman, who was today named as Lasser's replacement. Lasser also changed the heads of research and trading, and more than a dozen fund managers.

In 1998, Putnam's biggest bond funds posted losses from investments in emerging market debt, leading to the departure of eight fund managers and two heads of fixed-income investing in under a year. The turnover led to pension fund firings, including by Massachusetts, which pulled $1.3 billion of bond investments.

Changing personnel has been a fixture during Lasser's tenure starting in 1986 when the head of international investing, Walter Oechsle, and 11 people who worked for him resigned to start their own firm. Lasser sued, charging in an affidavit that the departing employees were trying to ``cripple or destroy'' Putnam's business. The suit was settled out of court and the new firm, Oechsle International Advisors LLC, now has $20 billion under management.

Harvard Graduate

In a 1995 interview with the Boston Globe, Lasser said he was a tough boss. ``Some people find me difficult to deal with and hard to understand and, maybe, not likeable,'' he told the newspaper. ``I'm sorry about that but I'll recover.''

Born in 1942, Lasser was the eldest of three sons. His father owned a garment-making business in New York and the Lasser boys were raised in Scarsdale, New York, a suburb 22 miles outside of Manhattan. He missed the radical student movements at the end of the 1960s after graduating from Antioch College in Ohio in 1965.

Next, while attending Harvard Business School, Lasser combined his growing business acumen with an interest in contemporary American art. He and a roommate would fly to Paris to buy prints by artists like Ellsworth Kelly and sell them back in Boston.

Even as he moved up the ranks at Putnam, Lasser ran an art gallery on Newbury Street in Boston's Back Bay neighborhood until 1981. Continuing his interest in art, Lasser selected prints by contemporary artists like Frank Stella and Roy Lichtenstein for Putnam's offices in downtown Boston's Post Office Square.

In last week's letter to customers, Lasser said he would take responsibility for recent events at Putnam.

``Having to do so is painful, as the issues involve contradict everything I have learned from Putnam and contributed to Putnam over the last 34 years,'' he wrote.