Prudential, Employees Accused of Fraud

The Commodity Futures Trading Commission accused Prudential Securities Inc. of failing to adequately supervise an account executive who allegedly defrauded customers trading orange juice futures contracts. The brokerage giant disputed the allegation. Prudential could face up to $500,000 in civil penalties and even the loss of its right to trade commodity futures. The CFTC said it will hold a public hearing to determine whether the accusations are true. A date has not been set, but Prudential and three former employees--who also deny the allegations--have 20 days to respond to the charges. “We believe that the oversight [by Prudential] was and is appropriate,” said Charles Perkins, a spokesman for the company at its New York headquarters. Perkins said it was Prudential’s own internal review of the account executive’s activities that prompted the CFTC investigation. He said the company intends to formally dispute the regulators’ allegation.