Pilgrim Baxter & Associates agreed to pay $90 million to settle a lawsuit with the SEC over allegations of market timing. As part of the settlement, the SEC agreed to drop a lawsuit charging Pilgrim Baxter with violating federal securities law by permitting select investors to conduct rapid-fire trades in some PBHG mutual funds while hurting long-term investors. The settlement requires Pilgrim Baxter to pay $50 million in civil penalties and $40 million to reimburse investors. Pilgrim Baxter also agreed to institute compliance and governance reforms.
The lawsuit against Harold J. Baxter and Gary L. Pilgrim was not part of this settlement. Both are charged with violations of securities laws.
