ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Tuesday, January 7, 1997 TAG: 9701070081
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: NEWARK, N.J.
SOURCE: Associated Press
Prudential Insurance Co. of America was fined $1million Monday by a federal judge who said the company destroyed potentially damaging documents relating to a class-action lawsuit over sales fraud.
U.S. District Judge Alfred Wolin ordered Prudential in 1995 to save documents that may affect the case, which could cost the company more than $1billion. The judge found documents were destroyed in at least four offices.
Prudential, which is based in Newark, said it would not appeal the ruling and would immediately begin implementing Wolin's remedies.
``Prudential remains committed to resolving its sales practices problems and pledges that no policy owners will be harmed because their records were not properly retained,'' company Chairman Arthur Ryan said in a statement.
The company last month fired the managing director of its Cambridge, Mass., office after disclosing he destroyed files that probably showed about 80 customers were misled by agents.
Prudential has admitted to deceptive sales practices and agreed to a settlement that could bring 10.7 million people who bought policies from 1982-95 at least $410 million - and perhaps more than $1billion.
Wolin, who could give final approval next month to the settlement, ordered Prudential to mail all employees a copy of his 1995 order barring document destruction and to set up a telephone ``hot line'' to encourage them to report any violations.
The class-action lawsuit alleged Prudential agents defrauded policyholders by persuading them to use the built-up cash value of older life insurance policies to finance more expensive ones. The tactic stripped value from the old policies and drained customer savings.
LENGTH: Short : 41 linesby CNB