Pruco Securities, LLC (CRD #5685, Newark, New Jersey) and Prudential
Investment Management Services LLC (CRD #18353, Newark, New Jersey)
submitted a Letter of Acceptance, Waiver and Consent in which they were
censured, fined $525,000, jointly and severally, and required to conduct an
audit and prepare written findings regarding their compliance with NASD
rules relating to the filing, approval and recordkeeping requirements for
advertisements and sales literature. Without admitting or denying the
findings, the firms consented to the described sanctions and to the entry of
findings that they committed numerous separate violations of NASD rules,
including failures to file advertisements and sales literature in a timely
manner with NASD, failures to have a registered principal approve
advertisements and sales literature prior to use with the public, and
failures to comply with their recordkeeping obligations for communications
with the public.

The findings stated that the firms failed to establish, maintain and enforce
supervisory systems and procedures reasonably designed to achieve compliance
with NASD rules governing filing, approval and recordkeeping with respect to
advertising and sales literature. The findings also stated that the firms
failed to file pieces in a timely manner with NASD, and lacked adequate
systems and procedures to monitor the timeliness of NASD filings. The
findings also included that the firms failed to take sufficient remedial
actions in response to written warnings from NASD that its filings were not
timely. NASD found that the firms used advertisements with the investing
public before a registered principal approved the sales literature for use
that went largely undetected by the firms, as they had no systems or
procedures to record when advertisements were first used with the public,
and their systems and procedures to detect when advertisements were used
prior to the requisite internal approval were not adequate. NASD also found
that the firms failed to create and maintain reliable records of when
advertisements were approved by a principal, and a flaw in their computer
system caused inaccurate approval date records to be created and maintained.
In addition, NASD determined that the firms failed to retain records of
filings with NASD’s Advertising Department and filed inaccurate dates of
principal approval with NASD. (NASD Case #EAF0401420002)