Public Can Comment on MFS Deal until Oct. 22

October 4, 2004 ( - Investors have until October 22 to comment on a plan to pay back MFS Investment Management fund shareholders who weren't told about fund payments to reward brokers for pushing MFS mutual funds.

Under the proposed plan worked out by an independent consultant, each MFS Fund would get a proportionate share of the money paid by MFS, CBS MarketWatch reported (See   WSJ: MFS, SEC Reach Directed Brokerage Settlement ). The money amounts to $1 in disgorgement and a civil penalty of $50 million, the SEC said.

In March, MFS agreed to the $50-million fine to help settle SEC charges relating to the use of fund assets to pay for fund marketing and distribution. The commission found that from at least January 1, 2000 to November 7, 2003, MFS hammered out agreements with about 100 broker-dealers under which MFS directed brokerage commissions on fund transactions to brokerage firms that agreed to give its funds heightened visibility within their distribution networks.

Federal and state regulators have been pursuing a wide ranging inquiry of the mutual fund industry, focusing largely on market timing, late trading, and certain sales practices.