A former senior vice president of Massachusetts Financial Services Co. was found today to have violated SEC regulations by using insider information to benefit from trades in 30-year Treasury bonds, an SEC news release said.
In the civil suit in U.S. District Court in Boston, the SEC charged that Steven E. Nothern and other MFS portfolio managers used embargoed information about an Oct. 31, 2001, announcement that the Treasury Department was suspending long-bond issuances to acquire $65 million in 30-year bonds for the funds they managed, generating about $3.1 million in illegal profits, the news release said.
The SEC's complaint is seeking a permanent injunction against Mr. Nothern, disgorgement with prejudgment interest and a civil money penalty, the SEC said in the release.
“The verdict makes clear that it's illegal to traffic in confidential market-sensitive information about government securities,” said Erica Williams, the SEC's lead trial attorney in the case, in the news release.
Mr. Nothern could not be immediately reached for comment.