Prudential Discloses More File Dumping

In the latest in a lengthy string of similar disclosures, Prudential Insurance Co. has told a judge that managers in the company’s Des Moines office discarded about 150 documents from customer files earlier this year.

The disclosure, likely to add fuel to speculation that the giant insurance company has been systematically destroying sensitive documents, came in the form of a letter from a Prudential attorney to the judge in a class-action fraud case against the company. The Times obtained a copy of the Dec. 27 letter on Monday.

In the letter to U.S. District Judge Alfred M. Wolin, Prudential attorney Reid L. Ashinoff said the company “is continuing to investigate” the Iowa incident, which it said violated company policy banning document destruction.

Ashinoff said the incident occurred in March and April and resulted from a Prudential compliance officer’s incorrect advice to office managers that it would be all right for them to purge the files.

In a separate development Monday, Wolin postponed to Feb. 24 from Jan. 21 a formal hearing at which he will consider the fairness of a proposed settlement between Prudential and 10.7 million life insurance customers nationwide.

Wolin also rejected a request from plaintiffs’ lawyers opposing the settlement for permission to call witnesses at the hearing.

He specifically refused to accept testimony from John Cressman, a former Prudential auditor who has said he alerted top executives to wrongdoing a decade earlier than the company admits it first knew of the improprieties.