Massachusetts Financial Services Co. (MFS)

On February 5, 2004, the SEC instituted administrative and cease-and-desist proceedings against Massachusetts Financial Services Co., John W. Ballen, and Kevin R. Parke. The SEC alleged that the respondents improperly permitted market timing in a group of MFS retail funds to the detriment of long-term investors in those finds. As part of the settlement, MFS must pay $175 million in disgorgement of ill-gotten gains and $50 million in a civil penalty for distribution to defrauded shareholders. The SEC also ordered Ballen and Parke to each pay a civil penalty of $250,000 and disgorge over $50,000.

For more information on the SEC's action, you can read In the Matter of Massachusetts Financial Services Co., John W. Ballen and Kevin R. Parke at IA-2213 (Feb. 5, 2004).

Under the terms of the SEC's Order, an independent distribution consultant must submit a distribution plan to the SEC to distribute the over $225 million to defrauded investors. The distribution consultant has been appointed and is developing the plan. Once the distribution plan is submitted for SEC approval, it will be published for public comment.

If you have questions, you can contact Pauline Zelkin in the SEC's Boston District Office at (617) 573-8999 or zelkinp@sec.gov.

http://www.sec.gov/divisions/enforce/claims/mfs.htm