Newark-Based Broker-Dealer Self Reports Securities Violations;
Agrees To Pay $100,000 Plus Restitution, Under Settlement
With the N.J. Division of Consumer Affairs' Bureau of Securities
Newark – Pruco Securities, LLC, a broker-dealer based in Newark, will pay $100,000 plus restitution related to late execution of certain mutual fund transactions, under the terms of the Consent Order between it and the Division of Consumer Affairs' Bureau of Securities.
Pruco self-reported the violations to the Bureau, and to date has paid $585,628 in restitution to 1,508 accounts held by New Jersey investors. Pruco will pay as many as 253 additional New Jersey investors up to $125,000. Under terms of its settlement with the Bureau, Pruco also will pay $40,000 in civil penalties, $40,000 toward the Bureau's investor education programs, and $20,000 in investigative reimbursement to the Bureau.
The violations included improper pricing of paper orders and failure to reasonably supervise its agents. Some paper orders were priced on a day other than the day when the order was received. After discovering these violations, Pruco conducted an internal review and implemented changes to its policies and procedures to ensure similar violations do not occur in the future.
"The bottom line is that investors will not sustain any losses resulting from the violations that occurred. This settlement reflects our commitment to protect investors and their hard-earned monies through robust regulation of New Jersey's securities industry," Attorney General Jeffrey S. Chiesa said.
Pruco's cooperation during the Bureau's investigation, and the corrective actions it has implemented to date, were taken into consideration when determining the settlement terms.
"It's always best to come clean and cooperate when an error is discovered, which Pruco did, but it does not always happen," said Eric T. Kanefsky, Acting Director of the State Division of Consumer Affairs. "Those who attempt to hide violations and stonewall our investigators will not succeed and, in the end, likely will face greater penalties."
"This highlights the necessity of broker-dealers to consider all consequences of not having proper procedures in place to ensure customers receive appropriate pricing for their securities," said Abbe R. Tiger, Bureau Chief. "When executing securities transactions, time is of the essence."
Delfin Rodriguez, Regulatory Officer in the Bureau, handled the Pruco case.
The Bureau of Securities can be contacted toll-free within New Jersey at 1-866-I-INVEST (1-866-446-8378) or from outside New Jersey at 973-504-3600. The Bureau's website is located at www.njsecurities.gov .