(DGVAX)

Dreyfus Aggressive Growth and its former manager Michael Schonberg have agreed to pay a combined $1 million in fines to settle a long-running flap over the fund's past IPO appetite and Schonberg's personal trading.

In June 1998, prominent short-seller Manuel Asensio

alleged that Schonberg, manager of Dreyfus Aggressive Growth and

(DRELX)

Dreyfus Premier Aggressive Growth at the time, invested both funds in

Chromatics Color Sciences International

(CCSI)

through a private placement in order to boost the value of his personal investment in the company.

In reaching the settlement, neither Dreyfus nor Schonberg admitted or denied any wrongdoing. In a statement, Dreyfus stressed that neither the firm nor the manager was found guilty of unlawfully using fund assets for personal gain or misleading investors.

The

Securities and Exchange Commission

and the New York attorney general's office say that, with the settlement, they have resolved their inquiries. The case centered on Aggressive Growth and whether or not shareholders were led to believe that the fund would focus on IPOs, tiny stocks and other aggressive investments. (For more on the inquiry, see this

TSC

story.)

In resolving the SEC inquiry, Dreyfus will pay $950,000 and Schonberg will pay $50,000 to the SEC. Schonberg has also agreed to a nine-month suspension from working in the investment business. He hasn't been the fund's lead manager since April 1998, and was put on paid leave the following July. He has since resigned.

Dreyfus also will reimburse New York for the investigation's costs and has voluntarily donated $1.6 million to the State University of New York "for the enhancement of investor education and awareness," according to the company's statement.

The fund launched in September 1995, and in its first year, Schonberg focused on micro-caps and IPO shares. After a strong return out of the gate, the fund sputtered as the less-than-liquid small and new stocks aged poorly. The fund lost 15.8% and 36.7% in 1996 and 1997, respectively.

Aggressive Growth is still far from a solid investment. Paul LaRocco took the reins from Schonberg in April 1998. He shifted the fund's focus to mid-cap growth stocks and managed a 36.9% return in 1999, trailing its average peer by more than 27 percentage points, according to

Morningstar

.

Kevin Sonnett took over last December and hasn't shot the lights out. Since Jan. 1, the fund is down 1.9%, still trailing its average peer.

Schonberg isn't listed as the manager on any fund in Morningstar's database.

Putnam International Fund Gets New Face

Putnam

filed paperwork with the SEC to reduce

(PINOX) - Get Report

International New Opportunity's 12b-1 or marketing fee and add a new face to the fund's portfolio management team.

The annual 12b-1 fee on the fund's Class B shares has been reduced from 1% to 0.9%, saving investors $100 for every $10,000 invested.

Also, Peter Hadden joined the fund's management team on May 1. He's been with Putnam since 1992, but this appears to be his first stint as a fund manager.

Ian McDonald owns shares of Putnam International New Opportunities.