WASHINGTON - An arbitration panel of the Municipal Securities Rulemaking Board has ordered Prudential Securities and a former broker to pay about $460,000 to an investor who bought Executive Life Insurance Co. - backed bonds through the firm.

The taxable deals issued by the Louisiana Agricultural Finance Authority and the Louisiana Housing Finance Agency in 1986 are among a series of troubled bonds nationwide were backed by the insurance company, which was taken over by regulators last year.

The investor in the Prudential case, who was not identified in the arbitration panel's report, charged that the firm and its broker at the time, Ray Tucker, violated the anti-fraud fraud provisions of the federal securities laws when Mr. Tucker sold the bonds to the investor in December 1989. The board's report does not provide further details.

The investor bought $170,000 of the total $150 million of the agricultural finance authority's 8.80% securitized agricultural revenue bonds, Series 1986A, due Oct. 1, 1996, and dated Sept. 15, 1986. The investor also bought $300,000 of the total $150 million of the housing finance agency's 8.61% securitized multifamily housing revenue bonds, Series 1986A, due Aug. 1, 1986, and dated July 31, 1986.

On condition of receiving the $460,000 award, the investor must deliver $470,000 face amount of the bonds to Prudential.

According to the report, the firm and Mr. Tucker denied all the charges, saying that they lack substance that the investor was in fact guilty of "recklessness and negligence."

"We're disappointed that the rulings only three of five of the trades went our way," said William Ahearn, a spokesman for Prudential. "We would like to point out that the size of the settlement is not as large as it appears since in exchange for our payment, we received the bonds back from the client" and the bonds have a higher face value than the settlement amount he said.

One source said the bonds are worth roughly one third of the face value of the bonds.

The source also noted that the buyer was sophisticated. "It's important to point out that the purchaser was not an individual investor, but a municipality."

The award by the arbitration panel was a partial one. The investor originally sought for five issues roughly $850,000, which includes the amounts paid for the bonds plus interest at 9% and attorney fees, according to the MSRB arbitration decision.

The other three claims involved purchases of: * $100,000 of Southeast Texas Housing Finance Corp. 8.6% securitized multifamily housing revenue bonds, Series 1986A, due Sept. 1, 1996, and dated Aug. 25, 1986. * $100,000 in Adams County, Colo., 9% industrial development revenue bonds, Series 1986A pool, due Nov. 1, 1996, and dated Nov. 25, 1986. * $50,000 of Louisiana Agricultural Finance Authority 8.80% securitized agricultural revenue bonds, Series 1986A, due Oct. 1, 1996, and dated Sept. 15, 1986.

A Prudential spokesman was unavailable for comment.

In earlier cases involving Executive Life's backing of bonds, MSRB arbitrators held two other major firms, Merrill Lynch & Co. and Van Kampen Merritt Inc., liable for losses that an Illinois bank suffered in connection with bonds backed by the insurance company.

Merrill Lynch and its broker were ordered in June 1991 to pay roughly half of the $355,000 in damages sought by the bank in connection with four taxable bond issues in Louisiana and Texas.

Van Kampen, meanwhile, was ordered to pay only a fraction of $490,000 sought by the bank, which in 1989 had bought a total of $650,000 in taxable bonds issued by the Southeast Texas Housing Finance Corp. and the El Paso Housing Financing Corp. in 1986.

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