The U.S. Securities and Exchange Commission reported that it has distributed US$31.5 million to more than 150,000 investors who were harmed by undisclosed mutual fund market timing in the MFS funds between 1999 and 2003.

The distribution is the first in a series of disbursements from the Fair Fund that will return approximately US$306 million to affected MFS account holders, the SEC said.

In 2004, the commission brought and settled public administrative and cease-and-desist proceedings against MFS, its chief executive officer John Ballen, and its president and chief equity officer Kevin Parke. Each consented to a commission order charging anti-fraud violations without admitting or denying the commission’s findings. Among other things, the commission ordered MFS to pay US$175 million in disgorgement and US$50 million in penalties for distribution through a Fair Fund.

“We are very pleased to begin distributing the MFS Fair Fund to investors injured by past market timing misconduct,” said David Bergers, director of the SEC’s Boston Regional Office.

The commission reports it has returned more than US$3.2 billion to injured investors through Fair Fund distributions since the passage of the Sarbanes-Oxley Act in 2002.