Two former Prudential Investment Management execs have sued the firm in federal court for forcing them out after they complained that Prudential changed the investment objective for a number of municipal bond funds they managed without notifying the board or asking shareholders for their approval, the Newark Star-Ledger reports. The two are Robert Waas, a former managing director, and Robert Germano, a former senior portfolio manager.
Waas and Germano attest that senior management asked them to adopt a new mandate for the funds in April 2004 that changed the investment objective from tax-exempt income to price appreciation. They voiced their concern to their superiors, and Prudential then hired a law firm to investigate the matter. The law firm concluded that the funds’ investment objective had not been changed, but the report didn’t address the issue, the two executives said.