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To: maceng2 who wrote (74)	10/13/2002 3:48:05 AM
From: maceng2	Read Replies (1) \| Respond to of 1417

Pru verdict sends chill through Wall Street By Joshua Chaffin in New York Published: October 11 2002 23:14 \| Last Updated: October 11 2002 23:14 news.ft.com An Ohio jury has sent what could be a chilling verdict to Wall Street. It ordered Prudential Securities on Friday to pay $11.7m in compensation and $250m in punitive damages to investors who accused the firm of unauthorised trading in their accounts. The award is one of the largest on record against a brokerage by individual investors. It is being taken by many as a sign of Middle America's new hostility toward Wall Street amid crashing stock prices and corporate scandal. "One really has to question Pru's decision to try it before a jury and not settle," said Mark Maddox, a lawyer at Maddox, Hargett, Caruso, which represented the investors. "The current environment poses a real threat to Wall Street firms." The case is even more unusual because it involves a former Prudential stock broker who sold his clients' stock investments amid the froth of the bull market in order to protect them. Neither the broker nor the firm are alleged to have profited from their conduct. Jeff Pickett, a stock broker in Prudential's Marion, Ohio office, sold all equity holdings for about 250 elderly clients over a two-day period in October 1998 without informing them, the complaint said. Mr Picket then used the proceeds to buy them more defensive money market investments. Mr Pickett made the trade after the Russian default and the near-collapse of the Long Term Capital Management hedge fund raised fears of a global market meltdown. The stock market quickly recovered and moved far higher. The investors claimed they lost more than $10m as a result of the unauthorised trades. The case offers a rare barometer of an American jury's views of Wall Street. Most securities complaints are settled behind doors in private arbitration. Prudential vowed to fight: "We will be asking the court to set aside the verdict," the firm said. "We believe that it doesn't have a legal basis and we believe it is unjustified."