Also, on November 17, 2004, the SEC
instituted administrative and cease-and-desist proceedings against Gary L. Pilgrim and Harold J. Baxter
Mr. Baxter is the former Chief Executive Officer and Chairman of the Board of Directors of Pilgrim Baxter & Associates, Ltd., the investment adviser to the PBHG family of mutual funds.
The Commission found that, contrary to the disclosures made in the prospectuses of all PBHG Funds
since at least 1996, PBA
, acting through Mr. Pilgrim and Mr. Baxter
, allowed various account holders to engage in transactions that violated the fund's prospectus disclosures from at least June 1998 through December 2001.
The Commission also found that PBA, acting through Mr. Pilgrim and Mr. Baxter, allowed various account holders to make more than 4 exchanges per year into the PBHG Cash Reserves Fund from other PBHG Funds.
Also, Mr. Pilgrim and Mr. Baxter
each were ordered to pay $60 million in disgorgement and $20 million in a civil penalty for distribution to affected shareholders.
The role of the IDC is to develop a plan for distributing the total $250 million settlement payment to shareholders in PBHG Funds
who may have been affected by the alleged market timing described in the June 21, 2004 SEC Administrative proceeding and the subsequent Administrative Proceedings dated November 17, 2004 involving Mr. Pilgrim and Mr. Baxter