The SEC charged Gary Pilgrim and Harold Baxter, as well as Pilgrim Baxter & Associates, with "fraud and breach of fiduciary duty" in connection with a market-timing scheme at the PBHG funds, back in mid-November. Pilgrim, then-president, investment chief, and director of Pilgrim Baxter, as well as the president of the PBHG funds, and Harold Baxter, CEO and chairman of the firm and chairman and trustee of the PBHG funds, resigned the day of the charges.

Pilgrim is accused of having an undisclosed "substantial interest" in hedge fund Appalachian Trails, which was allowed to time several PBHG funds, including one Pilgrim personally managed. Appalachian's arrangement was not disclosed.

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