Sun Life Financial Inc. said Monday that its U.S. mutual funds unit may face enforcement action by the U.S. Securities and Exchange Commission.
Sun Life said the Boston SEC office has indicated that it intends to recommend to the SEC that an enforcement action be taken against Massachusetts Financial Services Company, a Sun Life unit, for market timing issues.
MFS, the 11th largest mutual fund company in the United States, is 93-percent owned by Toronto-based Sun Life.
Sun Life said it was fully cooperating with the SEC.
"The SEC notice contains no allegations that any MFS employee was knowingly involved in either late trading or inappropriate personal trading in MFS funds," Sun Life said in a statement.
Last week, the SEC moved to slam the door on a mutual fund industry practice that has allowed illegal late trading to flourish. The SEC voted 5-0 to propose that fund companies no longer accept buy and sell orders after markets close, usually at 4 p.m., for trades to occur at that day's price.
Shares of Sun Life fell 36 Canadian cents to C$32.69 soon after the open on the Toronto Stock Exchange. In New York, the stock was down 18 cents at $25.15.