Sun Life Financial Inc. has reached a second settlement with the U.S. Securities and Exchange Commission over brokerage allocation irregularities at its Boston-based Massachusetts Financial Services Co. subsidiary .

The settlement was for US$50 million. It follows a US$351-millionsettlement and the replacement of MFS’s CEO in February. Under the settlement announced Wednesday, MFS “neither admitted nor denied wrongdoing.”

The firm was alleged to have provided incentives to selected brokerage firms and other distributors in exchange for their promotion of MFS funds to investors.

Donald Stewart, CEO of Sun Life said in a statement that the announcement reflects “our ongoing determination to resolve outstanding regulatory matters in the best interests of our customers and Sun Life Financial investors. We are continuing to work with the new management team at MFS to strengthen its policies and procedures to ensure they meet the
highest possible standards.”

Sun Life repeated that MFS is co-operating with the SEC’s investigation into market timing-related issues and directed brokerage and cash-splitting deals with distributors throughout the US$7-trillion American mutual fund industry. MFS, whose history dates back to 1924 with the first open-end mutual fund, managed $140 billion US in assets for six million investors worldwide as of the end of 2003.

Wednesday’s settlement arose from the common industry practice of forming preferred arrangements with broker-dealers that sell fund units. The settlement order states that MFS did not adequately communicate to its trustees and unitholders the conflicts of interest that might arise out of such arrangements.

In the February settlement, MFS paid US$225 million to compensate fund investors, agreed to reduce its fees by about US$25 million annually over the next five years and paid a $1-million penalty to the state of New Hampshire. John Ballen was dismissed as CEO, paid US$315,000 personally and was suspended from securities trading for nine months.

That settlement was for allowing market timing in 11 funds. Market timing – quick in-and-out trading of mutual fund units – is not illegal but reduces returns for small investors and violated policies outlined in MFS prospectuses.

Sun Life took a $211-million charge against fourth-quarter earnings in anticipation of the February settlement.