Prudential Equity Group (PEG), formerly known as Prudential Securities Inc., has agreed to pay $600 million in fines and restitution to resolve charges relating to improper market timing.
The charges against PEG allege that former PSI registered representatives defrauded mutual funds by concealing their identities, and those of their customers, to evade mutual funds' prospectus limitations on market timing. PEG has been ordered to pay a total of $600 million pursuant to a global civil and criminal settlement with the United States Attorney's Office for the District of Massachusetts, the Securities and Exchange Commission, the Massachusetts Securities Division, NASD, the New Jersey Bureau of Securities, the New York Attorney General's Office, and the New York Stock Exchange.
Under the terms of the settlement, the SEC says that $270 million will be paid to a distribution fund administered by the Commission for the benefit of those harmed by the fraud, $325 million will be paid as a criminal penalty to the U.S. Department of Justice, and $5 million will be paid as a civil penalty to the Massachusetts Securities Division.
