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Federal Inquiry Into Prudential Securities Told : Investigations: Probe is latest into suspected fraud by brokers and managers of limited partnerships, sources say.

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TIMES STAFF WRITER

The U.S. attorney’s office in Manhattan has begun a federal criminal investigation of Prudential Securities and suspected fraud by brokers and managers, sources close to the inquiry said.

The probe, which was launched more than a month ago, was broadened within the last week to include the firm’s massive limited partnership program, which took in $6 billion from investors in the 1980s and resulted in huge losses.

The sources said federal prosecutors are looking into the possible payment of kickbacks and attempted bribes to senior Prudential Securities officials by outside companies that managed individual partnership programs. Among the programs being looked at are the Energy Income Funds, which took in $1.44 billion, mainly from retirees and other small investors.

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The federal criminal investigation adds to numerous investigations of Prudential Securities already underway.

The Securities and Exchange Commission has been conducting a high-priority investigation of the firm and its limited partnership sales. In addition, a six-state task force--working on behalf of securities regulators in all 50 states--is conducting a probe. Several of the states have their own criminal investigations pending, state regulators confirmed.

The New York federal investigation initially centered on allegations of forgery and fraud against customers by certain former Prudential brokers and managers, including some in the firm’s Dallas office.

Prudential Securities spokesman William J. Ahearn declined to comment, saying it is the firm’s policy not to talk about pending “regulatory matters.” Prudential has denied wrongdoing in connection with its partnership program and noted that individual brokers who may have acted improperly are no longer with the firm.

As is its standard practice, the U.S. attorney’s office would neither confirm nor deny that it has an investigation underway.

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