Contact Us

PW Case Review Form
*    Denotes required field.

   * First Name 

   * Last Name 

   * Email 


   * Please describe your case:

What injury have you suffered?

For verification purposes, please answer the below question:

No Yes, I agree to the Parker Waichman LLP disclaimers. Click here to review.

Yes, I would like to receive the Parker Waichman LLP monthly newsletter, InjuryAlert.

please do not fill out the field below.

MFS Expected Today To Settle Market-Timing Allegations

Jan 1, 2002 | Boston Globe Boston-based MFS Investment Management is expected to reach agreements today with the Securities and Exchange Commission, New York Attorney General Eliot Spitzer, and the New Hampshire Bureau of Securities Regulation regarding allegations it allowed investors to engage in improper market-timed trades in its mutual funds.

The settlement is contingent upon a vote of the commissioners of the SEC, slated for 10 a.m. today, according to people active in the negotiations.

MFS is expected to pay $225 million in fines and disgorgement of profits from the activities. Part of the settlement will be set aside to fund a national investor education program regarding mutual funds. MFS will also have to disclose details of the settlement to its current shareholders.

Separately, Spitzer is expected to negotiate a $125 million reduction in the fees MFS charges investors, cutting fees by $25 million a year for five years. Last year, Spitzer reached a settlement with Alliance Capital, also accused of market-timing wrongdoing, in which it reduced fees by about $350 million over five years.

As part of the MFS settlement, chief executive John W. Ballen is expected to receive a nine-month suspension from the securities industry, and Kevin R. Parke, president and chief investment officer, is expected to receive a six-month suspension. Rob Manning, chief fixed-income officer at MFS, is expected to be named CEO.

The negotiations between MFS and the three regulatory offices have taken many twists and turns, with settlements repeatedly put off, as lawyers battled over details and the severity of the punishment for the two executives, according to people involved in the talks. MFS hired Jerry A. Hausman, an economist at the Massachusetts Institute of Technology, to show how much MFS shareholders might have lost as a result of the market timing. Hausman's analysis showed a possible loss of $100 million, which several regulators dismissed as implausibly low, according to people who have seen the presentation.

In recent weeks William R. McLucas, a partner at the Washington law firm of Wilmer Cutler Pickering LLP and former head of the SEC's enforcement division, handled much of MFS's most sensitive negotiations.

Other articles
Parker Waichman Accolades And Reviews Best Lawyers Find Us On Avvo