Prudential Financial $600 Million Corruption Crackdown

On August 28, 2006, Prudential Financial agreed to pay a $600 million penalty to regulators and federal prosecutors to settle charges it engaged in deceptive market timing mutual fund trading.

The U.S. Justice Department stated that Prudential Equity Group has admitted to criminal wrongdoing under a deferred-prosecution agreement that will last for five years. According to the agreement, Prudential will cooperate with federal prosecutors in their ongoing investigation and will enforce policies and procedures to ensure sound practices are in compliance.

Deceptive market timing uses quick trades to move money in and out of funds quickly to take advantage of different market closing times throughout the world. Brokers defeated safeguards to protect against such illegal activities by using false accounts and false identities to give the impression that the trades were coming from many different brokers representing many clients.

The agreement was collaboratively announced by the U.S. Deputy Attorney General, the Securities and Exchange Commission Enforcement Director, the U.S. Attorney of Massachusetts, the Chief of Enforcement of the N.Y. Stock Exchange and the Chief of the U.S. Postal Inspection Service of the Boston district.

America must not tolerate fraud for corporate ethics are vital for the sound financial fiber of the nation and the protection of loyal employees and innocent investors.

Read the U.S Department of Justice Press Release: http://www.usdoj.gov/dag/speech/2006/dag_speech_060828.htm