Amex Disciplines Prudential and Four Former Employees
Prudential Securities Inc., two of its former branch managers--including the one-time head of the firm’s San Diego office--and two other former employees have been disciplined by the American Stock Exchange for rules violations, the exchange said Friday.
Meanwhile, a source confirmed that Prudential is talking with federal regulators about settling possible charges arising from the sale of energy limited partnerships that soured.
The Amex disciplined Prudential for failing to supervise several branch offices and for allowing customers to satisfy margin calls on foreign currency options in a way that exposed them to financial risks they may not have been able to bear.
Amex officials said Prudential and its former employees settled the charges without admitting or denying the allegations. The brokerage, a subsidiary of Prudential Insurance Co. of America, was censured and fined $200,000.
David Utter, who managed Prudential’s San Diego office, was disciplined for failing to reasonably supervise the activities of employees Robert Modiano and Gregory Ripperger and failing to exercise due diligence in opening customer option accounts.
Utter was fined $20,000 and suspended for one year from acting in a supervisory capacity with any Amex member or member organization.
Modiano and Ripperger were censured and barred for 10 years from employment or association in any capacity with an Amex member or member organization, with five years deemed served.
The exchange also said it disciplined Richard Sugarman, former branch manager of Prudential’s Richmond, Va., office.
The settlement talks with the Securities and Exchange Commission concern 35 oil and gas limited partnerships that Prudential sold between 1983 and 1990.
About 130,000 investors poured $1.44 billion into the partnerships, which were sponsored by Prudential and Graham Resources of Covington, La. Investors lost hundreds of millions of dollars when those partnerships soured.
The negotiations with the SEC, which could result in a large fine against Prudential, were first reported in Friday’s editions of the New York Times.
