John Hancock has settled with the Securities and Exchange Commission on charges that it failed to disclose $14.8 million in revenue-sharing agreements with 55 brokerages between 2001 and 2004. In exchange for the payments, the brokerages promoted Hancock mutual funds and variable annuities and gave the investment management firm's marketing and sales staff access to their representatives at conferences and meetings.

Hancock, which neither admitted nor denied the allegations, is paying $21.3 million, $19.3 million of which is going back into the portfolios. Hancock is paying another $2 million in fines.

The SEC said Hancock used brokerage commissions to pay marketing expenses for mutual funds and variable annuities sold by the 55 affiliated distributors.

"In calculating the amount of brokerage commissions used to reduce revenue-sharing payments, in some instances, broker/dealers used a formula that required John Hancock to spend a higher amount in brokerage commissions than it would have paid in cash," the SEC said. "John Hancock advisers never disclosed to the retail mutual fund boards this use of fund assets," thereby failing to meet its fiduciary duty. The SEC has charged eight companies with secretive revenue-sharing arrangements. Most recently, Hartford Financial Services paid $55 million in November to settle such a case.

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