Massachusetts Financial Services will pay a $50 million fine to the SEC for not disclosing directed-brokerage agreements, The Wall Street Journal, reports, citing a person who has been briefed on the case and who thinks the settlement could be announced as early as today.

If MFS is charged the fine, it would be the first company to be penalized for failing to disclose the fee arrangements mutual fund firms have with brokerage firms for pushing their products, or giving them preferred status. MFS is not expected to admit or deny wrongdoing, according to The Journal.

On top of the $50 million, the SEC will also ask MFS to repay the fees it gained from selling funds through these directed-brokerage arrangements. MFS has already agreed to a $225 million settlement for market timing.

MFS put a temporary stop to directed brokerage in November and, shortly after, decided to end it permanently. Spokespersons for MFS and for the SEC declined to comment on the directed-brokerage charges.


The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.