Like rats running from a sinking ship,

Putnam

investors have taken back another $7 billion in the past week.

That $7 billion might almost seem like good news, given that the fund family lost $14 billion in the first week of November.

But the 8% drop in assets over two weeks -- Putnam held $277 billion at the end of October, and assets were at $256 billion as of Friday -- is only the tip of the iceberg for the fifth-largest fund company.

Several states -- including Massachusetts, Rhode Island and Iowa -- have already taken steps to remove their pension assets from Putnam. This week, the California Public Employees' Retirement System (Calpers) and the California State Teachers' Retirement System (Calstrs) will likely decide to move their combined $1.5 billion in assets from Putnam's management. Calpers and Calstrs are the largest and third largest pension funds, respectively.

On Oct. 28, Putnam settled with the

Securities and Exchange Commission

, which found that since 1998 at least six Putnam investment managers engaged in excessive short-term trading of Putnam funds in their personal accounts. The SEC noted gross negligence on the part of Putnam for failing to take adequate steps in curtailing this behavior, and has prescribed a list of remedial actions the firm must take. Two of the six investment managers face separate civil suits brought by the SEC.

At the same time, the Massachusetts Secretary of the Commonwealth launched civil charges alleging violations of the state's securities law antifraud provisions, stating that Putnam permitted fund managers to engage in activities contrary to Putnam's stated policy against market-timing and short-term trading. Putnam is also alleged to have breached its fiduciary duty to Putnam fund shareholders by allowing such employee conduct.

Putnam parent company Marsh & McLennan

(MMC) - Get Report

did a little rearranging of the deck chairs in its quarterly report, filed Monday, stating that the fund family was able to handle the heavy redemptions without its affecting portfolio management, and that "positive flows from the institutional business were more than offset by net outflows in the retail mutual operations."

Meanwhile, Putnam faces at least 16 class-action lawsuits and two direct shareholder actions, as of Nov. 12, Marsh & McLennan's quarterly report says. In addition, Putnam's insurance-broker parent will likely face a few derivative actions.