The Securities and Exchange Commission says that investors who were affected by the fraudulent market timing in the PBHG Funds will receive $73 million. This is the second of three disbursements to be made from the Pilgrim Baxter Fair Fund.
Pilgrim Baxter & Associates, Ltd. was the investment adviser for PBHG Funds during the time when the fraudulent market timing took place. By the time the third disbursement is made, 384,000 investors affected by this fraud scheme will have been paid.
The Fair Fund came about because of the SEC enforcement actions charging the PBHG Funds of “unlawful market timing” by Harold J. Baxter, Gary L. Pilgrim, and Pilgrim Baxter & Associates Ltd. The charges against PBA for allowing certain investors to market time were settled three years ago when PBA agreed to the fine of $90 million in civil penalties and disgorgement (although PBA did not deny or admit guilt). It also agreed to put into place mutual fund governance and compliance reforms.
Pilgrim and Baxter, the founders of the mutual fund family, agreed to being banned from the securities industry and to paying $160 million in penalties and disgorgement. They also settled federal and New York charges of allowing the illegal market timing.
$125 million-the first payment-was disbursed in April. The last disbursement will take place in September 2007.
More than $1.8 billion in Fair Funds to investors who have been the victims of securities fraud.
If you are an investor who has lost money because of the illegal conduct of members of the securities industry, the best way to get your investment back it to retain the services of an experienced securities litigation attorney. Shepherd Smith and Edwards has represented thousands of clients across the United States and we have collectively recovered over $100 million for them.
To schedule a free consultation with Shepherd Smith and Edwards, contact us today.
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