SEC Fines Massachusetts Financial Services $1.9M for Misstatements

Brokerage Firm Massachusetts Financial Services has agreed to pay over $1.9 million to settle allegations by the U.S. Securities and Exchange Commission (SEC) for misstatements made in advertisements that insinuated high returns relating to blended stock research ratings.

According to the SEC, Massachusetts Financial Services touted its blended research ratings to clients without disclosing that some of the claims performance came from back-tested models.

In addition to the fine, the company has been censured and ordered not to commit any future violations.

Massachusetts Financial Services Ads Misled Clients

As far back as 2001, MFS combined research ratings from MFS’s fundamental analysts and quantitative models to manage portfolios of stocks for client investment. The ads in question stated that over time blending of fundamental and quantitative stock ratings could yield better returns than either type of ratings alone. The ads, however, did not reveal that some of the returns were misleading because of backdated data.

The SEC noted that though the research support that MFS included in the advertisements was labeled as hypothetical, it did not disclose that the data was based on back-tested quantitative ratings. Luckily, the SEC did not find any financial loss to MFS clients.

About Massachusetts Financial Services

Registered with the SEC since 1982, Massachusetts Financial Services manages about $378 billion in assets, made up of $362 billion in mutual funds and pooled investments and about $16 billion in separately managed accounts for institutional clients.

Have You Lost Money as a Result of Massachusetts Financial Services?

If you lost money investing with Massachusetts Financial Services or think you may have been misled, contact an experienced investment fraud attorney today.

Speak with an Investment Fraud Attorney Today

Our AV-rated* lawyers have extensive experience litigating a broad range of investment disputes and we will aggressively pursue claims to recover your investment losses. We’ve recovered more than $100 million in assets lost to investment fraud and stockbroker misconduct.

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. represent individual and institutional investors who have lost money as a result of investment fraud or stockbroker misconduct.

Contact Dimond Kaplan & Rothstein

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