WASHINGTON, United States (AP):

Prudential Financial Inc and a subsidiary have agreed to pay US$600 million (€469 million) in penalties to resolve government allegations of deceptive market timing in the trading of mutual funds, a Justice Department official said Monday.

The Justice Department will file a 'criminal information' charge against Prudential Financial and its subsidiary, Prudential Equity Group, but has agreed to defer prosecution so long as the companies abide by terms of the agreement, the official said. The official requested anonymity because the formal announcement had yet to be made.

A 'criminal information' is a criminal charge filed in court by prosecutors, usually when the defendant has agreed to waive grand jury indictment.

Agreement

The agreement was to be announced Monday afternoon at a news conference by Deputy Attorney-General Paul J. McNulty, Securities and Exchange Commission enforcement director Linda Thomsen, U.S. attorney Michael J. Sullivan of Boston, and Peter Zegarac, chief of the Boston district of the U.S. Postal Inspection Service.

The government alleges that New York-based Prudential Equity Group engaged in deceptive late market timing in the trading of mutual fund shares, the official said.

The US$600 million penalty would resolve all civil and criminal allegations, the official added. The agreement was reached with both Prudential Equity Group and its parent company, Prudential Financial Inc of Newark, New Jersey.