Sadis Successfully Represents Whistleblower in SEC Enforcement Action Against Leading Investment Adviser MFS for Misleading Marketing Materials

Sadis & Goldberg represented an anonymous Whistleblower who helped the U.S. Securities and Exchange Commission (“SEC”) bring an important enforcement action against $380-billion investment adviser Massachusetts Financial Services Company (“MFS”) for misleading marketing materials.  The SEC ordered MFS to pay a $1.9 million civil penalty for improperly using back-tested data to misleadingly claim that MFS’s blend of Quantitative and Fundamental Research portfolios (“Blended “Research”) outperformed pure Quant and pure Fundamental Research strategies.

The SEC’s order alleges that MFS did not disclose its use of back-tested data, and that it did not disclose that back-tested data was critical to its misleading claim that a hypothetical Blended Research portfolio outperformed pure-Quant and pure-Fundamental Research strategies.  Further, the SEC found that MFS falsely claimed that it had Quantitative stock ratings dating back to the 1990’s, when it had none at the time.

This is the latest of several important cases actions arising from Whistleblowers represented by Sadis & Goldberg.  A Sadis & Goldberg-represented Whistleblower also played a key role in the investigation and criminal trials of “Pharma Bro” Martin Shkreli and his attorney, which resulted in Shkreli being sentenced to seven years in jail and in $18.4 million in forfeiture, restitution and penalties.

Partner Sam Lieberman led Sadis & Goldberg’s representation of the Whistleblowers in the MFS and Shkreli matters, with assistance from Partner Jennifer Rossan and Associate Ben Hutman in the MFS case.  If you have any questions about this matter or Sadis & Goldberg’s Whistleblower and Securities Enforcement practice generally, please contact Sam Lieberman of Sadis & Goldberg at (212) 573-8164 or by email at SLieberman@sglawyers.com.