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Regulators probe Prudential

Date Class
7th May 2004 Fraud Investigation
NEW YORK (Reuters) - Prudential Financial Inc., the second largest U.S. life insurer, said Friday that regulators have requested information on the company's mutual fund sales, and that certain inquiries may lead to disciplinary action.

In a regulatory filing with the Securities and Exchange Commission, Prudential said the SEC, New York Stock Exchange and the NASD, among others, had requested information "relating to the purchase and sale of mutual fund shares and variable annuities."

The company added that "certain of the matters under investigation are likely to lead to proceedings. We are engaged in ongoing discussions with the above organizations and are fully cooperating with them."

Prudential's disclosure comes as several large institutions have been implicated in a wide-ranging scandal over improper trading of mutual funds, which has reverberated through the $7.6 trillion industry.

Several firms have recently settled with federal and state regulators for breaking company rules that forbid certain trading practices.

"The update in this (filing) is that we changed the language from 'could lead to proceedings' to 'is likely to lead to proceedings'," said Robert DeFillippo, a Prudential press representative.

"Like a lot of companies involved, after responding to inquiries from regulators for some time now, it reflects where we are in that process and we felt it was prudent to update the (filing) to reflect that," he added.

In Prudential's document, it added that among those parties seeking information was New York State Attorney General Eliot Spitzer, the principal architect of the regulatory enforcement activity against the mutual fund industry.




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