The Massachusetts Financial Services Company (MFS) will pay a $1.9 million penalty for using false and misleading ads to promote portfolio strategies from 2006 to 2015, the SEC announced.

MFS, based in Boston, will pay the penalty under an agreement with the SEC in which it neither denied nor admitted to the charges, the agency said on Friday.

The investment advisory company was accused by the SEC in an administrative action of violating the Advisers Act by making false statements in promoting "blended" research strategies that offered ideal portfolios containing stocks that were rated a "buy" by both MFS's fundamental analysts and quantitative models. The ads claimed to show that the blended strategies led to performance that was superior to using either fundamental or quantitative strategies by themselves.

The SEC alleged some of the ads were misleading because they failed to disclose that some of the quantitative ratings used to create the hypothetical portfolios used a retroactive, back-tested application of the MFS quantitative model.

"Back-tested performance carries the risk that the performance depicted is not due to successful predictive modeling," the SEC said in its complaint.

MFS advertised the hypothetical returns of its blended strategies to institutional investors, consultants and financial intermediaries including broker-dealers, insurance companies and investment advisors, the SEC said.

"MFS also falsely claimed that the hypothetical portfolio was based on MFS's own quantitative stock ratings dating back to the mid-1990s, even though before 2000 MFS did not have a quantitative research department or generate its own quantitative stock ratings," the SEC complaint said.

The ads were ended by the company's compliance department in 2015, the agency said.

MFS issued the following statement in regards to the agreement:

"MFS has entered into a settlement with the U.S. Securities and Exchange Commission regarding misstatements in disclosures in certain marketing materials provided to institutional audiences for its blended research strategies.

MFS, which neither admits nor denies the allegations, has cooperated fully with the SEC. As described in the SEC order, MFS voluntarily discontinued the use of the materials in question in late 2015 (prior to the SEC's investigation), consistently labeled them 'hypothetical,' restricted their use to institutional audiences, and generally provided them along with actual standardized returns of its blended research products."

Importantly, the SEC made no finding of any intentional wrongdoing or financial loss to our clients. Indeed, the SEC made no findings questioning the construction or performance of our blended research strategies. MFS retained a third-party compliance consultant to assist MFS in enhancing our compliance program to help ensure we continue to market all of our strategies appropriately."

As of May 31, MFS had about $21 billion in assets under management invested in its blended research strategies, the SEC said. MFS has about $378 billion under management, including about $362 billion in mutual funds and other pooled investment vehicles and $16 billion in separately managed accounts for institutional clients, according to the SEC.