State and federal regulators announced Thursday a $350 million settlement with Massachusetts Financial Services to resolve charges that it knowingly allowed preferred customers to market time ten of its mutual funds.

The Securities and Exchange Commission, crusading New York Attorney General Eliot Spitzer and New Hampshire’s Bureau of Securities Regulation made a joint agreement with MFS that requires the company to pay $175 million in restitution to harmed investors, slash fees by $125 million over the next five years and pay a $50 million fine. Additionally, the nation’s 10 th largest mutual fund company agreed to hire a top-level executive to ensure its fees are reasonable and are negotiated at arms length.

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.