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Rating:MFS Agrees to SEC Fine Not Rated 5.0 Email Routing List Email & Route  Print Print
Friday, September 05, 2003

MFS Agrees to SEC Fine

by: Sean Hanna, Editor in Chief

MFS Investment Management has agreed to pay a $918,000 million fine to put to rest allegations that it improperly profited from trades following the final 30-year Treasury auction. Both MFS and Goldman Sachs allegedly learned of the Treasury Department's plans from a consultant before the news that it would cease issuing the maturity were made public on October 31, 2001. Both firms allegedly then purchased the bonds intending to resell them when the decision was announced.

Meanwhile, Steven E. Northern, formerly a senior vice president and fund manager at MFS, is continuing to contests civil charges stemming from the matter brought by the SEC yesterday. John Youngdahl, formerly chief economist at Goldman Sachs, is also continuing to contest the matter. He also faces possible criminal charges for insider trading and perjury, according to the SEC.

Goldman Sachs made a similar settlement with the SEC in which it agreed to pay $9.3 million. Goldman reportedly earned $1.5 million on the trades while MFS gained $3.1 million.

The consultant, Ned Davis, also agreed to settle with the SEC and pay $150,000. In addition, he pled guilty to insider trading charges brought by federal regulators.  

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