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Prudential Agrees to Pay Fine
For Mutual-Fund Trading Practices

By Landon Thomas Jr.
THE NEW YORK TIMES

Prudential Financial, the life insurance company, agreed Monday to pay $600 million to settle charges with federal and state regulators that one of its units engaged in inappropriate mutual fund trading.

The payment, the second-largest levied against a financial institution over the practice, may bring to a close a three-year investigation into the improper trading of mutual funds that has ensnared some of the largest names on Wall Street and the mutual fund industry.

The settlement with the Justice Department, which covers trades totaling more than $2.5 billion made from 1999 to 2000, is also the first in the market timing scandal in which an institution has admitted to criminal wrongdoing.

Such a concession by Prudential, part of a deferred prosecution agreement that will last five years, underscores the extent to which the improper trading practices had not only been widespread, but condoned by top executives at Prudential Securities, despite repeated complaints from the mutual fund companies.

“The deceptive trading practices at Prudential were compromising the integrity of many mutual funds,” Paul J. McNulty, the deputy U.S. attorney general, said. “Investors were dealt a bad hand by corporate con men who stacked the deck against them.”

Severe Plains Drought Hurts
Land, Lives, Traditions

By Monica Davey
THE NEW YORK TIMES


MITCHELL, S.D.

With parts of South Dakota at its epicenter, a severe drought has slowly sizzled a large part of the northern Great Plains, forcing farmers and ranchers into conditions that they say are comparable to the Dust Bowl of the 1930s.

The drought has led to desperate, rarely-used methods. Shrunken sunflower plants, normally valuable for seeds and oil, are being used as a makeshift feed for livestock. Despite soaring fuel costs, some cattle owners are hauling herds hundreds of miles to healthier feedlots. And many ranchers are pouring water into “dug outs,” or natural watering holes for animals, because so many of them (up to 90 percent in South Dakota, by one reliable estimate) have gone dry.

South Dakota Gov. Mike Rounds, who has requested that 51 of the state’s 66 counties be designated a federal agricultural disaster area, recently sought unusual help from his constituents: he issued a proclamation declaring a week to pray for rain.

Hamas Spokesman Blames Palestinians For Gaza Chaos

By Steven Erlanger
THE NEW YORK TIMES


JERUSALEM

In an unusual instance of self-criticism, a well-known Hamas official has deplored the collapse of Gazan life into chaos and has said that much of the blame belongs to Palestinians themselves.

“Gaza is suffering under the yoke of anarchy and the swords of thugs,” wrote Ghazi Hamad, a former Hamas newspaper editor and the spokesman for the current Hamas government, in an article published Sunday in Al-Ayyam, the Palestinian newspaper.

After so much optimism when Israelis pulled out of Gaza a year ago, he wrote, “life became a nightmare and an intolerable burden.”

He urged Palestinians to look to themselves, not to Israel, for the causes. But he appeared to be placing the blame elsewhere than on Hamas or the Palestinian Authority prime minister, Ismail Haniya of Hamas.