MFS Agrees To $225 Million Settlement

In addition, MFS will be paying the New Hampshire securities regulators a $1 million administrative fine.

Ballen has agreed to accept a 9-month suspension from the SEC and pay $315,000 in compensation and penalties, and Parke has agreed to accept a 6-month suspension and pay $315,000 in compensation and penalties, Sun Life Financial says.

In related news, Sun Life Financial has named Robert Manning to take over as president, chief executive and chief investment officer of MFS. Manning has been the MFS chief fixed income officer since 2001.

Sun Life Financial says MFS and the SEC found evidence that outside parties placed illegal late trades in certain MFS funds, without MFS’ knowledge and in violation of MFS’ contracts with the broker-dealers that placed the trades.

“MFS intends to vigorously pursue restitution from the parties responsible for such illegal late trading,” Sun Life Financial says. “Neither the SEC nor the state complaints alleged that there is any evidence that any MFS employee engaged in any criminal activity, or was knowingly involved in late trading. Nor did the complaints allege that MFS accepted so-called ‘sticky assets,’ or assets invested in certain funds in exchange for the right to market time other funds.”

In the past, MFS has taken a number of steps to guard against market timing and late trading.

Now, MFS also has agreed to hire an independent compliance consultant, create an internal compliance controls committee, establish an ethics oversight committee and hire a corporate ombudsman who will listen to MFS employees who have concerns about company business practices.