Prudential agrees to settle with SEC

Prudential Financial yesterday agreed to settle allegations from the SEC that it used reinsurance contracts to overstate its income by more than $200 million.
AUG 07, 2008
Prudential Financial Inc. yesterday agreed to settle allegations from the SEC that it used reinsurance contracts to overstate its income by more than $200 million. In U.S. District Court in Newark, N.J., the Securities and Exchange Commission alleged that from December 1997 to December 2002, Prudential’s former property-casualty subsidiaries, known as Prupac, based in Holmdel, N.J., entered into a series of reinsurance contracts with Stamford, Conn.-based General Re Corp., a subsidiary of Omaha, Neb.-based Berkshire Hathaway Inc. These contracts had no economic substance and served only to build up and draw down on an off-balance-sheet asset that Gen Re held for Prupac, the SEC said. Between 1997 and 1999, Prupac built up this asset, then drew down on it between 2000 and 2002, improperly recording the payments as income. In 2001, when Prudential of Newark went public, those inaccurate financial statements became part of its annual, quarterly and current filings with the SEC, the regulator alleged. The insurer did not admit or deny the SEC’s accusations. However, it did consent to a permanent injunction and did not pay any fines.

Latest News

Advisor moves: RBC lands $1B UBS team in Pittsburgh
Advisor moves: RBC lands $1B UBS team in Pittsburgh

Elsewhere, Wells Fargo Advisors adds a $400 million Morgan Stanley veteran in Naples as an ex-Cetera advisor goes independent with LPL

GWG’s Heppner hires Puff Daddy’s attorneys as criminal sentencing looms
GWG’s Heppner hires Puff Daddy’s attorneys as criminal sentencing looms

According to a federal charges Bradley Heppner, 60, received more than $150 million in payments through funneling money from GWG Holdings to a shell company.

Investors accuse Broadstreet fund of alleged billion-dollar 'Ponzi-like' scheme
Investors accuse Broadstreet fund of alleged billion-dollar 'Ponzi-like' scheme

A $1B fund allegedly skimmed 30% off the top, then swapped cash for locked-up stock.

Lawsuit alleges Skechers founders manipulated $9.4B buyout to shortchange investors
Lawsuit alleges Skechers founders manipulated $9.4B buyout to shortchange investors

Insiders allegedly rewrote projections three times in four days.

Fintech bytes: FINNY signs Visionary Square for pay-as-you-go AI prospecting program
Fintech bytes: FINNY signs Visionary Square for pay-as-you-go AI prospecting program

TCI Wealth Advisors also has also tapped JIFFYAI to unify onboarding and servicing, while TradePMR adds ICE market data to its Fusion advisor platform

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor