In July, 1996, The Prudential Insurance Company agreed to pay a $35 million
fine for misleading sales practices after a task force of insurance regulators from
11 states and the District of Columbia found that Prudential agents had engaged
in misconduct. This article examines Prudential's actions, its response to the ethi
cal crisis, and the ways in which the organization communicated its response to
stakeholders. Many of Prudential's sins were rhetorical: Agents misrepresented
some products to customers. Charges of misrepresenting products to clients stem
back to problems with its securities division, then known as Prudential-Bache.
Prudential is making amends to its customers who were harmed by egregious
sales practices, but it may take the organization a long time to recover customer
goodwill and the damage incurred to its reputation.
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