Prudential Financial Expects to Be Fined

Prudential Financial Inc. will “undoubtedly” be fined by regulators because some brokers breached procedures for selling annuities, Chief Executive Art Ryan told shareholders.

Prudential said Friday that it had alerted the NASD, which regulates brokers, and New York’s Insurance Department after discovering last year that some brokers weren’t following New York regulations. The regulations require clients to sign off on disclosure documents signifying that the companies have explained the pros and cons before switching them to a new annuity. The brokers involved were fired, the company said.

“Procedures were violated,” Ryan said at the Newark, N.J.-based company’s shareholders meeting. “They will undoubtedly fine us, as they normally do.”

Ryan, who didn’t give an estimate of the fine, called the scope of the violations “substantially different” from sales practices that led the company to agree in 1997 to pay more than $2 billion.

From Bloomberg News