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PRUDENTIAL SECURITIES 'STONEWALLS' ON $2.9 MILLION CLAIM

 PRUDENTIAL SECURITIES 'STONEWALLS' ON $2.9 MILLION CLAIM
 LARGO, Fla., July 28 /PRNewswire/ -- Prudential Securities has


adopted a new tactic in responding to customer arbitration claims: simply stonewall.
 On March 21, 1992, Donald and Jane Sherman of Tampa, Fla., filed a $2.9 million claim before the National Association of Securities Dealers against Prudential Securities (formerly called Pru-Bache Securities) and its former broker, Lawrence Kelner. The claim alleged that Kelner and Prudential had sold the Shermans, and Mr. Sherman's then 89-year-old father, a series of unsuitable investments in illiquid limited partnerships, risky option and junk bond funds, and other securities. The claim also alleged that Kelner engaged in "selling away" by selling the Shermans investments in his own private deals such as Highlands Group, Ltd., a supposed real estate limited partnership based in Pinellas County, Florida.
 On the same day the Shermans' claim was filed, the Wall Street Journal reported that Kelner and his former business partner had each been fined $7,500 by the NASD and suspended for five days. They were disciplined for engaging in private securities transactions without providing their member firms prior written notice.
 The total amount of the Shermans' claim is approximately $2.9 million. The NASD served Prudential with the claim on April 8, 1992. Prudential was required to file a statement of answer to the claim by May 14, 1992.
 The NASD was unable to effect service of the claim on Kelner. A private process server, hired by the Sherman's attorney, located Kelner in Lakeland, Fla., and served him with the claim on July 13, 1992.
 To date, Prudential has failed to respond to the claim. The Shermans' attorney, Allan J. Fedor, of Largo, has asked the NASD arbitrators to preclude Prudential from presenting any defense at the arbitration hearing because of its failure to file a timely answer to the claim.
 "Unfortunately," Fedor commented, "the Shermans' case is typical of what happens here in Florida. A large brokerage firm lures retirees by promoting a 'rock-solid' image, and then hires brokers who run amok selling those retirees completely unsuitable investments, like limited partnerships. Prudential is responsible for the damage done by its unsupervised brokers.
 "Prudential's refusal to respond to the Sherman's claim is a direct violation of NASD rules," Fedor continued. "Prudei?al's attempt to 'stonewall' on legitimate customer complaints will backfire. The Shermans, and other Florida retirees, will persevere with their claims, and that stonewall will come tumbling down."
 -0- 7/28/92
 /CONTACT: J. Camille Ayles of Fedor & Fedor, 813-581-6100/ CO: Fedor & Fedor; Prudential Securities S ?Florida IN: FIN SU:


AW-JB -- FL006 -- 4000 07/28/92 10:50 EDT
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Date:Jul 28, 1992
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