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Prudential may shut bank
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November 16, 2000: 2:57 p.m. ET
Closure of investment unit would follow withdrawal from fixed income business
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NEW YORK (CNNfn) - Prudential Securities is considering shutting down its investment banking unit, along with other options.
New York-based Prudential Securities held a conference call with employees Tuesday in which recently named Chief Executive John Strangfeld tried to allay fears that the unit would be sold. Strangfeld said during the call that Prudential would be reviewing all its operations, a company spokesman said.
"No final decisions have been made about anything," the Prudential spokesman said. "We would want to keep everyone as informed as possible."
Asked specifically if Prudential is considering shutting down the investment banking unit, the spokesman said: "We are looking at all operations." The spokesman added that such a review normally follows an executive change.
Closing the unit would affect 250 investment bankers. The American Banker.com, which first reported Thursday that Prudential might close the unit, said an announcement could come in the next few weeks. The American Banker report quoted unnamed company employees.
Prudential Securities, a unit of Prudential Insurance Co. of America, has failed to keep up with such top-tier investment underwriters as Goldman Sachs and Merrill Lynch. Prudential Securities is ranked 15th among debt and equities underwriters and is responsible for $16.5 billion in underwritings in the past several years, according to Thomson Financial Securities Data.
The move to shut its investment banking arm is seen as an attempt to focus on its retail brokerage operations, insiders said.
News of an investment banking closure follows a decision by Prudential to shut down Nov. 1 its institutional fixed-income business, closing its municipal finance activities and asset-backed securities business. The reorganization led to the firing or layoff of 400 traders and institutional sales representatives, the Prudential spokesman said. 
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Prudential Securities
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