MFS to Settle Allegations of Hidden Broker Fees

MFS Investment Management, which last month agreed to $351 million of sanctions for allowing improper mutual fund trading, will pay $50 million to settle regulators’ allegations that it made hidden payments to brokers who promoted its funds.

MFS, based in Boston, paid the brokers out of fund assets, hurting investors, the Securities and Exchange Commission said in a statement Wednesday. The enforcement action is the first against a fund company for participating in marketing programs by brokerage firms that regulators have said were marred by conflicts of interest.

MFS is a unit of Canada’s Sun Life Financial Inc. with $140 billion under management.