MFS Investment Management knew about market timing in its funds but was slow in curtailing it, according to e-mail messages obtained by The Boston Globe.

James V. FitzGerald, who heads up the sales team at MFS, wrote in a May 14 e-mail, "Hi everyone¬ÖEffective immediately, MFS will not be taking any new money from market timers. We currently have approximately $1.3 billion in known timer money at MFS."

Perhaps the most alarming part of FitzGerald's e-mail was how he seemed to treat market timing as a routine business strategy. While admitting timers "can cause unnecessary trouble to an asset management company," he wrote "Consequently, we feel that MFS has more than enough of this type of money at this time."

New York Attorney General Eliot Spitzer is negotiating with MFS, which is 93% owned by Toronto-based Sun Life, about settling short of civil action. Given Spitzer's determination to stamp out abuses, it seems obvious that he will go after MFS for admitting so nonchalantly that market-timing money was just another "type of money."

As has been the case with most companies involved in Spitzer's probe, fee reduction for harmed investors is a key point in the negotiations.

While the Securities and Exchange Commission would not comment on whether it too was negotiating with MFS, the company itself admitted last month that the Boston office of the SEC was setting up a civil suit recommendation.

MFS executives like CEO John Ballen and President Kevin Parke were cc'd on the e-mail. The Globe reports that later e-mails mentioned market timing and discussed how to stop "known timers."

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