Prudential Securities
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| Industry | Investment banking |
|---|---|
| Fate | Acquired by Wachovia Corporation to form Wachovia Securities |
| Predecessor | Bache & Co., Prudential-Bache Securities |
| Successor | Wachovia Securities and Jefferies Bache |
| Founded | 1981 |
| Defunct | 2003 |
| Headquarters | New York, New York |
| Products | Financial services |
| Parent | Prudential Financial |
Prudential Securities, also formerly known as Prudential Securities Incorporated (PSI), was the financial services arm of the insurer, Prudential Financial. In 2003, Prudential Securities was merged into Wachovia Securities, a division of Wachovia Bank.
Prudential Securities traces its origins to the founding of the Leopold Cahn & Co. brokerage and investment bank in 1879. In 1891, the firm was reorganized as J.S. Bache & Co. after Jules Bache was brought into the partnership.
In 1974, Bache merged with Halsey, Stuart & Co., a Chicago-based investment bank founded in 1911. In 1952, Halsey, Stuart made headlines when its managing partner, Harold L. Stuart, testified before the U.S. Supreme Court for the government's antitrust case against Morgan Stanley and 16 other major investment banks. The fact that Halsey, Stuart was a significant investment banking firm, at the top of the IPO league tables in 1951 led some observers to suspect that they had provoked the government's antitrust suit.
In 1981, the company (then called Bache Halsey Stuart Shields) was acquired by Prudential Financial and renamed Prudential-Bache Securities. Prudential dropped the usage of the Bache name in 1991, renaming the division Prudential Securities.
In 1989, the firm acquired branch offices, client accounts and related assets from Thomson McKinnon when a deal to purchase Thompson McKinnon fell through a top 20 brokerage and investment banking firm.
During the 1980s and 1990s, Prudential Securities Incorporated, was investigated by the Securities and Exchange Commission (SEC) for suspected fraud. During the investigation, it was found that PSI had defrauded investors of close to $8 billion, the largest fraud found by the SEC in US history to that point. The SEC charged that Prudential allowed rogue executives to cheat customers on a large scale and blithely ignored a 1986 SEC order to overhaul its internal enforcement of securities laws. In all, some 400,000 individual investors lost money on the deals.
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