A professor’s study of the impact of market timing trading at Putnam Investment management LLC finds that the actual trading only created losses of $4.4 million, while the heavy redemptions that ensued cost $48.5 million.

The Securities and Exchange Commission released the results from research conducted by professor Peter Tufano (Sylvan C. Coleman Professor of Financial Management at Harvard Business School as well as a senior associate dean at the school), the independent consultant retained in the Putnam case. Prof. Tufano’s report finds that losses attributable to market timing activities and excessive short-term trading by Putnam employees total $4.4 million, including interest.

The costs to Putnam shareholders stemming from the unusually high level of redemptions following public disclosure of allegations with respect to market timing and short-term trading at Putnam total $48.5 million, including interest.

The report expresses no view as to what portion of the post-disclosure redemption costs, if any, should be attributed to Putnam’s misconduct, Putnam has agreed to compensate shareholders for 100% these costs. As a result, under to the terms of prior commission orders, Putnam is required to make a further payment of $43 million in addition to the payments of $5 million in disgorgement and $50 million in civil penalties previously made.

Peter Bresnan, an associate director in the SEC’s Division of Enforcement, stated that commission staff has reviewed the methodology Tufano used in arriving at his calculations, and has determined that it’s acceptable in the Putnam case.

“We note, however, that it might not be appropriate to apply certain of Prof. Tufano’s methods in different factual situations and that we do not endorse Prof. Tufano’s methods for calculating losses attributable to market timing and excessive short-term trading as necessarily constituting the best method or the only method for calculating such losses,” he added.