Prudential sued for late trading violations

Prudential Securities today was named in a civil lawsuit filed by William F. Galvin, Massachusetts state secretary, claiming that brokers in the firm's Boston office allowed hedge fund customers to execute more than 1,200 late trades, valued at more than $162 million, in the past two and a half years. The state's administrative complaint demands that Prudential conduct an audit to determine investor losses resulting from the late trading, and make restitution. The complaint also calls for an unspecified fine. Mr. Galvin said According to the suit, Prudential brokers allowed hedge fund clients to send to Prudential a preliminary list of possible trades to be made after the market's 4 p.m. ET close, and then executed only those trades that were advantageous to clients. "This scheme was clearly a violation of Prudential's internal controls," Mr. Galvin said.