PROVIDENCE -- A group supporting moderate Republicans has entered the U.S. Senate fray with a hard-knuckled ad alleging that GOP challenger Stephen P. Laffey's last two jobs as a stockbroker "ended in disgrace" and he was sued by one former employer "for stealing confidential documents that Laffey didn't return until a judge made him."

The ad was scheduled to begin airing late last night on Channel 6 (WLNE), at the behest of a group calling itself Republicans Who Care Individual Fund that is affiliated with the Republican Main Street Partnership.

Members of the partnership include Laffey's target in the Sept. 12 GOP primary: incumbent Sen. Lincoln D. Chafee. Along with Chafee, its elected members include Senators Susan Collins and Olympia Snowe, Maine; John McCain, Arizona and Arlen Specter, Pennsylvania.

A Laffey spokeswoman said the temporary restraining order referenced in the ad was a result of "a misunderstanding," dating back 15 years, between Laffey and his former employers at the New York firm Dunlevy & Co.

Of the ad itself, spokeswoman Nachama Soloveichik said: "This is yet another despicable ad from Senator Chafee and his Washington insider backers. After seven years in the Senate, Senator Chafee and his backers have nothing good to say about Mr. Chafee, so they have to keep slinging mud."

"It is untrue," she said of the thrust of the allegations, "and Rhode Islanders have clearly had enough of Senator Chafee's dirty games. They will make their feelings about Mr. Chafee and his campaign very clear on election day."

With time running out for the candidates -- and their backers -- to get in any final digs before Tuesday's primary, a flurry of new ads have hit the airwaves in recent days. One slams Chafee as a wasteful tax-and-spender; another resurrects allegations that Laffey took campaign contributions from executives in a company seeking a contract to install an automated traffic-ticketing system in Cranston that Laffey had allowed to mount a demonstration project.

The $100,000 ad campaign launched last night by the Republicans Who Care Individual Fund, was aimed at what it describes as Laffey's promise to "go to Washington to clean up the mess." While it covered some old ground, it added a new array of charges to the debate.

As headlines whip by, the viewer hears: "After so many scandals, we need to insist our leaders act with integrity. Does Mayor Steve Laffey measure up? In Cranston, Mayor Laffey gave no-bid contracts to campaign contributors. As a stockbroker, Laffey's last two jobs ended in disgrace.

"Laffey was pushed out [of] one job in a palace coup. Another company took Laffey to court. . . sued him for stealing confidential documents that Laffey didn't return until a judge made him. Call Steve Laffey. Tell him integrity still counts."

Laffey was unavailable for comment. But Soloveichik said the ad misrepresents the $10 trial contract Laffey gave Nestor Traffic Systems, with a caveat -- in writing -- that "if it moved from the trial phase to the active phase, the project would have gone out to bid."

About the circumstances in which Laffey left the top ranks of the Memphis brokerage firm, Morgan Keegan & Co., the ad quotes a story about his "abrupt departure" that appeared in the Memphis Business Journal on May 4, 2001. Laffey had been appointed president and chief operating officer the previous October.

Yesterday, a spokesman for Morgan Keegan said the company would have no comment.

The May 2001 article said, in part: "Insiders described a 'palace coup' in which personality conflicts drove longtime investment bankers and retail producers . . . to demand Laffey's removal."

Soloveichik posed this question yesterday: "Who are these [anonymous] insiders?"

She said Laffey continues to have good relationships with top executives at Morgan Keegan, and she produced evidence from Laffey's filings with the Federal Elections Commission that company chairman Allen Morgan Jr. and vice chairman John W. Stokes had each donated the maximum $4,200 to his Senate bid.

The oldest and most serious of the charges centers on the petition for a temporary restraining order that a former Laffey employer, Dunlevy & Co., filed against him in the Supreme Court, New York County, in June 1992.

In affidavits filed with the court, top company officials accused Laffey, a salesman at the Madison Avenue company from Nov. 12, 1990, until May 18, 1992, of deleting correspondence and customer-information from his company computer while taking with him, when he left, "a substantial amount of proprietary and confidential information."

In one such affidavit, the company's secretary-treasurer Paul E. Gorman said the missing documents "taken by Laffey relate to the identities, backgrounds, interests and investment preferences and practices of clients and potential clients of Dunlevy & Co. Such information is absolutely vital to the brokerage business."

The affidavit cited a May 20, 1992, handwritten letter in which Laffey said he was "not in possession" of any such proprietary or confidential information. "I believe that letter to be false," Gorman wrote. "But even if the letter is true, Laffey does not deny in the letter that he removed the proprietary and confidential information from Dunlevy & Co.'s offices -- only that he is no longer in possession of it."

On May 28, a judge ordered Laffey to refrain from "destroying, disseminating or utilizing" any of the material he took with him "or failed to return upon his resignation."

Two weeks later, Laffey "delivered all of the subject materials" to a lawyer, the case was settled, and the plaintiff "consented to the immediate vacating of the temporary restraining order," according to court filings produced yesterday by the group sponsoring the TV ad.

Campaign spokeswoman Soloveichik said all Laffey took with him were Wall Street Journal articles and "some research he had done."

"They accused him of taking proprietary documents; he didn't take proprietary documents . . . He gave over to them all the documents he had . . . They mutually agreed to drop the case and they made a note in his file that the case had been settled and it was a misunderstanding," she said.

When asked to clarify who had labled the standoff a misunderstanding, Soloveichik said: "I am telling you that it was a misunderstanding."

Like the conservative Club for Growth, which is backing Laffey, the group sponsoring the ad is a 527 organization that makes independent expenditures on campaigns -- outside the control of individual candidates and outside the fundraising limits that the FEC enforces on conventional political action committees.

The group's patrons include some pillars of the old-line GOP establishment, including David Rockefeller ($25,000), former U.S. Rep. Amory Houghton Jr., R-N.Y., ($15,000) and John C. Whitehead, chairman of the Goldman Sachs Foundation ($25,000).

Whitehead was among the sponsors of a Chafee fundraiser hosted by Mayor Michael R. Bloomberg in New York yesterday.

With reports from Staff Writer Scott Mayerowitz and John E. Mulligan of the Journal Washington Bureau.