Federal and state regulators are expected to announce a civil settlement Monday with the company¿s securities unit, according to a report in
The Wall Street Journal
late Friday that cited two people familiar with the situation.
Prudential will pay about $600 million and avoid prosecution, according to the report. The amount will make the settlement one of the largest stemming from a broad investigation in recent years into abusive mutual fund trading practices. In 2004,
Bank of America
agreed to cough up $675 million. The probe has yielded more than $3 billion in fines from mutual funds, brokerages and hedge funds.
The report said a large group of regulators has signed on to the Prudential settlement, including the Department of Justice, the
Securities and Exchange Commission
, the National Association of Securities Dealers, the
New York Stock Exchange
, and state officials in New York, New Jersey and Massachusetts.
Regulators filed a suit against Prudential about three years ago alleging that five of the firm¿s brokers and their Boston branch manager helped investors make quick trades in and out of mutual fund shares. Such trades can harm long-term investors, because they increase the funds¿ operating costs.