NATION

NATION
Financial house dumpsleaders, pays restitution
BOSTON -- The company credited with inventing the mutual fund 80 years ago was formally swept up in the improper fund trading scandal Thursday, as Massachusetts Financial Services agreed to relinquish $350 million in a deal that also forced out two top executives.
The agreements reached with the Securities and Exchange Commission and regulators in New York and New Hampshire also restrict MFS chief executive John Ballen and president Kevin Parke from certain types of jobs in the fund industry for three years.
Late Thursday, MFS' parent company, named Robert J. Manning, previously chief fixed income officer, as MFS' new CEO. In a brief statement, Toronto-based Sun Life Financial also expressed satisfaction with the settlement, which does not include any admission or denial of wrongdoing by the company, Ballen or Parke.
MFS will pay $175 million in restitution to investors and $50 million in penalties, as well as reduce fees charged to shareholders by $125 million. Ballen and Parke will each pay a $250,000 penalty and more than $50,000 back in profits from the company's practices.
Labor reports risein U.S. productivity
WASHINGTON -- The productivity of America's workers grew modestly in the final three months of 2003, raising hopes that companies will step up hiring to meet demand rather than relying solely on increased efficiency.
The Labor Department reported Thursday that productivity -- the amount an employee produces for every hour on the job -- grew at a 2.7 percent annual rate from October through December. Although that was a slowdown from the 9.5 percent rate for the three previous months, it nevertheless was a respectable pace that bodes well for the economy's recovery, analysts said.
For all of 2003, productivity grew by 4.2 percent, following a 4.9 percent increase in 2002.
Tower Recordsnears bankruptcy
WEST SACRAMENTO, Calif. -- Tower Records, the pioneering record retailer that invented the music megastore, is likely to file for bankruptcy to aid a potential sale, a source close to the matter said Thursday.
A filing could involve swapping debt for equity in a move to reduce Tower's debt burden and clear the way for a potential buyer, the source said, speaking on condition of anonymity. The bankruptcy was likely to come within a week, the source said.
MTS Inc., the privately held parent of the West Sacramento, Calif.-based record retailer, declined to comment on the possible Chapter 11 filing. Such a filing would be nearly a year after MTS decided to sell Tower because it could not pay $5.2 million in debt on $110 million in bonds sold in 1998.
Associated Press