Harold Baxter and Gary Pilgrim, founders of Pilgrim Baxter & Associates, resigned after an internal review found Mr. Pilgrim had an interest in a limited partnership that had actively traded some of the company's PBHG Funds a few years before, with Mr. Baxter's knowledge. Pilgrim Baxter halted that trading in December 2001, said spokesman Tucker Hewes.
David J. Bullock, president and COO, will assume Mr. Baxter's role as CEO. Scott F. Powers, CEO of the firm's parent, Old Mutual Asset Management, will take over Mr. Baxter's role as chairman. Mr. Bullock also assumed Mr. Baxter's posts as chairman and trustee of the PBHG Funds and PBHG Insurance Series Fund. Mr. Bullock will retain his current positions for now. Mr. Powers will stay as CEO of Old Mutual.
Mr. Pilgrim will return to the PBHG Funds all personal profits he received from the limited partnership's investments in PBHG Funds, and Pilgrim Baxter will reimburse any management fees that were attributed to the limited partnership's investments in the funds, Mr. Bullock said in a message to shareholders.
Mr. Pilgrim's portfolio management duties will be temporarily assumed by Michael Sutton, CIO, who runs the PBHG Large Cap Growth Fund, and by Peter Niedland, the portfolio manager who runs the Emerging Growth Fund.