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Case Status:    DISMISSED    
On or around 02/23/2005 (Date of order of final judgment)

Filing Date: February 04, 2003

According to the latest docket posted, on January 14, 2005, the plaintiffs filed a Proposed Notice of Voluntary Dismissal, and on February 23, 2005, the Court entered the Stipulation and Order Dismissal, signed by U.S. District Judge Samuel Conti. By the Stipulation of Dismissal, the case was dismissed with prejudice.

The complaint alleges that as a matter of corporate policy, Prudential with deliberate recklessness encouraged its brokers to promote writing put options for its customers. A person who 'writes' a put agrees, in return for a small fee, to purchase a stock from any investor who purchases said put during a period of specified duration in the future at a specified price, at the purchaser's option, even if the stock sells for a lower price on the open market. As alleged in the complaint, it is a high risk strategy.

The complaint further alleges that while Prudential was writing puts on behalf of its customers, Prudential and its parent company, Prudential Insurance Company of America, were buying puts as a means of hedging against potential losses from market price declines in equities which they held for their own accounts. The complaint alleges that the above actions created an undisclosed conflict of interest between Prudential and its customers because Prudential was buying puts in the same markets in which it was encouraging its customers to write puts. Prudential was, in effect, protecting itself and its parent company by transferring their own investments risks to its customers. Furthermore, the complaint alleges that since Prudential was itself following the opposite strategy of what it was advising its customers, thus with deliberate recklessness giving advice that it did not believe.

Based on the foregoing, the complaint seeks damages, restitution and injunctive relief based on claims that Prudential breached its fiduciary and statutory duty to class members and that Prudential violated Section 10(b) of the Securities Exchange Act of 1934.

According to a news article from August 2003, Prudential Securities, Inc. wrote in a June 20, 2003 San Francisco federal court filing that the proposed securities fraud class action alleging put option chicanery is 'absurd,' lacks factual support and should be dismissed. The first effort in the U.S. District Court for the Northern District of California sought damages for state law fraud, negligence and breach of fiduciary duty. The court dismissed that cause of action May 27, 2003. The first amended complaint at issue here had been filed in the same court May 22, 2003.

Note: The class contains California residents who, while customers of Prudential Securities, Inc., and in the course of the relationship, engaged in the investment process known as writing put options in not less than three years prior to the filing of the original complaint in this matter, which was February 4, 2003.

COMPANY INFORMATION:

Sector: Financial
Industry: Money Center Banks
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: PRU
Company Market: Privately Traded
Market Status: Privately Held

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: N.D. California
DOCKET #: 03-CV-00507
JUDGE: Hon. Joseph C. Spero
DATE FILED: 02/04/2003
CLASS PERIOD START: 02/05/2000
CLASS PERIOD END: 02/04/2003
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Kirtland & Packard, LLP (Los Angeles)
    2361 Rosecrans Avenue, Fourth Floor, Kirtland & Packard, LLP (Los Angeles), CA 90245
    310.536.1000 310.536.1001 · info@kirtland-packard.com
No Document Title Filing Date
COURT: N.D. California
DOCKET #: 03-CV-00507
JUDGE: Hon. Joseph C. Spero
DATE FILED: 11/21/2003
CLASS PERIOD START: 02/05/2000
CLASS PERIOD END: 02/04/2003
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Kirtland & Packard, LLP (Los Angeles)
    2361 Rosecrans Avenue, Fourth Floor, Kirtland & Packard, LLP (Los Angeles), CA 90245
    310.536.1000 310.536.1001 · info@kirtland-packard.com
  2. Lehmann Law Office
    1450 Grant Ave., P.O. Box 1846, Lehmann Law Office, CA 94948-1846
    415.897.2121 415.898-6959 ·
No Document Title Filing Date