Late trading occurs when investors are allowed to trade in funds after U.S. markets close at 4 p.m. EST. Investors buying after that time are supposed to pay the next days price. But the SEC charges some funds gave certain investors same-day pricing, in effect giving them inside information they could use to profit at the expense of other fund investors.
MFS, in Boston, "is cooperating fully with the SEC," Sun Life adds.
Sun Life owns 93% of MFS, the 11th largest mutual fund company in the U.S. MFS is also one of the top 10 providers of mutual funds sold through banks, notes Kenneth Kehrer, head of a Princeton, N.J., financial research firm.
A spokesman for the New York Attorney General Eliot Spitzers office declined to comment on whether it plans to join in the SEC action. A report Wednesday in the Toronto newspaper, the Globe & Mail, said the attorney general has asked MFS to provide information about allegedly illegal trading. The newspaper cited unidentified sources.
The attorney general has allied with the SEC in recent enforcement actions against a number of mutual fund providers, including Putnam Investments, Boston.
MFS funds under investigation by the SEC are MFS Emerging Growth; Massachusetts Investors Trust; Massachusetts Investors Growth Stock Fund; MFS Research Fund; MFS Total Return Fund; MFS Government Securities; and MFS Bond Fund.
Reproduced from National Underwriter Life & Health/Financial Services Edition, December 12, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
