The SEC brought an enforcement action against Massachusetts Financial Services Company (MFS) for making material misstatements and omissions to certain of its advisory clients and others concerning hypothetical stock returns associated with MFS’s blended research stock ratings. The SEC stated that MFS offered investors blended research strategies that combined research ratings from MFS’s fundamental analysts and quantitative models to manage portfolios of stocks for client investment. The SEC found that from 2006 to 2015, MFS advertised that the basis of its blended research philosophy was that fundamental and quantitative management styles excel in differing market conditions, and that blending fundamental and quantitative stock ratings could over time yield better returns than either type of ratings alone. To illustrate the validity of its claim that blending two sources of ratings was better than one source alone, MFS advertised the results of a hypothetical portfolio of stocks rated “buy” by both MFS’s fundamental analysts and quantitative models. In its advertisements, MFS showed how this hypothetical portfolio had annualized returns from 1995 forward that exceeded the annualized returns of either a hypothetical portfolio of fundamental “buy” rated stocks or a hypothetical portfolio of quantitative “buy” rated stocks.