NEW ORLEANS (AP) _ Who reads the fine print in the legal brochure that accompanies every publicly traded investment? No one, says a federal judge, including himself.

The observation was volunteered by U.S. District Judge Marcel Livaudais shortly before he approved a $120 million settlement involving Prudential Securities Inc. on Friday.

Attorneys had spent three days arguing whether a complicated prospectus for limited energy partnerships conned 130,000 investors who lost $300 million during the 1980s. Under the settlement, Investors will receive an estimated 88 cents for every lost dollar.

The investments are tied into a scandal involving limited partnerships sold by Prudential-Bache, the firm's previous name, in fields such as oil, real estate and entertainment.

The New York-based brokerage last year agreed to set up a $371 million compensation fund as part of a settlement of state and federal charges that it misled clients into thinking risky partnership investments were safe.

Dissenting investors wanted Livaudais to reject the settlement so potentially higher payments could be pursued in court and before the Securities and Exchange Commission.

In securities cases, fraud can be proven if it is shown that a company or partnership violated terms in the prospectus, which spells out how investors' money will be handled. Prudential claimed the energy partnerships went bust because of an unprecedented fall in oil prices.

Livaudais, who has been on the class-action case for three years, said he had not run into anyone who actually reads a prospectus. In handling his own business, the judge said, he listens to the advice of a broker he trusts, looks at the sales material and makes a decision. ''The prospectus goes into the garbage can,'' he said.

Livaudais said he had received countless letters and telephone calls from investors complaining about the partnerships. None, he said, complained about alleged violations of the prospectus.

''The question of the prospectus being misleading. It's not supposed to be. It's against the law. But who reads it?'' he said.

Stewart Goldberg, an attorney representing investors opposed to the settlement, said the prospectus - even if no one reads it - is the legal protection investors have against fraud.

As for the Prudential-Bache sales brochures, one of which included a picture of a retired couple, Goldberg said: ''The more I see them, the more I realize that if I had had the money, I would have bought them.''

But Edward Grossman, an attorney representing investors who favored the settlement, said proving fraud against Prudential would be difficult.

''If Prudential did nothing wrong, they would not be offering $120 million,'' Grossman said. ''If we were guaranteed success (in proving fraud), we would not be accepting the $120 million.''

The judge pointed out that under federal rules, he could not alter the settlement amount. ''Prudential wants out. I might say, 'Pay $240 million and you can get out.' But I can't do that. It's take it or leave it.''

Since most of the 116,000 class-action plaintiffs favored the settlement, the judge said, ''I don't think I can stand in the way.'' Those who dropped out of the class action can still pursue their own claims.