BOSTON — A firm that set off fears about money-market funds by allowing its biggest fund to drop below a safety benchmark closed nearly two-dozen funds to share purchases last night.

New York-based Reserve Funds said that effective immediately, 23 funds no longer will offer any class of shares for purchase to retail or institutional clients until further notice, except through dividend reinvestment. Investors placing orders to redeem their investments in the funds will not receive any money for up to seven days, Reserve said.

The list of closed funds includes Primary Fund, which set off worries late Tuesday after announcing the value of the fund's assets had dropped to 97 cents for each $1 put in by investors, exposing them to losses.

The instance of "breaking the buck" marked only the second time in the four decades since industry-founding Primary Fund became the first-ever U.S. money-market mutual fund in 1970 that a fund couldn't assure clients of the full value of their investments.

The fund, by far Reserve's largest, had held more than $65 billion as of Aug. 31, but those assets plunged to $23 billion on Tuesday as investors pulled out money because of the fund's investment in debt of Lehman Brothers Holdings Inc. The investment bank filed for bankruptcy on Monday after the government declined to extend a bailout.

Reserve said Wednesday that two other smaller money funds also had broken the buck: Reserve Yield Plus Fund, and Reserve International Liquidity Fund, a fund available only to offshore investors.

Those funds also were among those closed to share purchases yesterday, along with others that largely invest in U.S. government debt, and funds buying the bonds of individual states.

A news release announcing yesterday's fund closures did not say whether additional funds had broken the buck, and messages seeking comment from a company spokeswoman were not returned.

As of June 30, Reserve oversaw more than $124 billion across all its money management products serving millions of accounts and hundreds of financial institutions, according to the firm's Web site.

The Primary Fund's troubles heightened anxieties of investors seeing fewer safe places to sock away cash amid volatile markets this week. This includes money-market funds that hold a total $3.4 trillion — a number that had until recently grown because of the funds' conservative reputation compared with riskier investments such as stocks.

Since the Primary Fund broke the buck, many money fund firms have issued statements seeking to reassure investors about their products' safety and lack of exposure to some of the financial services firms whose troubles have rocked markets this week.

The Primary Fund's demise came after the value of $785 million the fund held in unsecured debt issued by Lehman was written down to zero on Tuesday.

In the first instance of a fund breaking the buck in 1994, investors in the Community Bankers Mutual Fund ultimately lost about 4 cents on the dollar. That fund differed from the Primary Fund case because it was for a group of bankers, not retail investors.

In most instances in which a fund is in danger of breaking the buck, the fund's parent firm supplies cash from its own holdings to maintain an adequate fund balance — a step that at least 20 fund firms have taken over the past 14 months.

Money-market funds are restricted by federal regulation to make conservative investments in low-risk securities, although they lack the federal deposit insurance that other safe investments such as bank deposits offer.