Judge Clears Way for Prudential Settlement : Securities: The $110-million class-action accord would benefit most of those not already covered by awards.

Prudential Securities’ huge penalties from its limited-partnership debacle have grown again as a federal judge Wednesday cleared the way for a $110-million class-action settlement on behalf of most investors not already covered by earlier awards.

Prudential spokesman Charles Perkins said Prudential’s fines, penalties and settlements totaled in excess of $1.5 billion--not counting the latest settlement.

The latest settlement came in a civil racketeering class-action pending before U.S. District Judge Milton Pollack in Manhattan. The suit was filed as a kind of “catch-all” case to cover people who, for a variety of reasons, weren’t covered by an earlier settlement between Prudential and the Securities and Exchange Commission, or by other class-action settlements involving specific partnerships.

Clinton Krislov, one of the lead lawyers for investors in the suit, estimated that the settlement would cover 100,000 people.

In an interview, Pollack said the settlement covers a large number of investors who had never bothered to file claims against Prudential. “This is supposed to reach all those who either have not thought about their losses or, having thought about it, didn’t want to go to the trouble or expense of” pursuing a claim, the judge said.

In a statement, Perkins said, “We believe this is a fair resolution to resolve remaining claims from investors in limited partnerships.”

Wednesday’s settlement won’t end all claims pending against it from its partnership disaster. Investors who are still pursuing individual lawsuits or private arbitration cases may still go forward with their claims, although they will have to send in notices “opting out” of the class-action settlement by an Oct. 30 deadline, Krislov said. He said, however, that the settlement won’t have any effect on investors who still have claims pending on the settlement pool administered by the SEC.

During the 1980s, investors poured about $8 billion into some 700 limited partnerships sold by Prudential. The firm marketed them aggressively to retirees and other small investors, often falsely claiming that the investments were safe alternatives to bank certificates of deposit. Most of the partnerships produced losses.

In 1993, Prudential settled with the SEC, and agreed to set up an open-ended fund to cover claims by investors. In 1994, it reached an unusual settlement of federal criminal charges, agreeing to pay an additional $330 million into the SEC fund and admitting criminal wrongdoing in exchange for being put on probation for three years.

The SEC fund has paid out hundreds of millions of dollars more to investors than Prudential originally estimated. But under the terms of the SEC settlement, some investors weren’t eligible, and others chose to reject offers made by the administrators of the SEC settlement pool.

To collect money under the settlement, investors will simply have to show documentation that they invested in one of the partnerships, and that they were not covered by any earlier settlement. Krislov said that if there is any money left over after all of the covered investors come forward, it would automatically be turned over to the SEC’s settlement pool.

Krislov said that although Prudential has now agreed to settle his class-action, the case will go forward against other defendants, including a number of outside firms that ran the limited partnerships whose units were sold by Prudential.