As the news broke yesterday that New York Attorney General Eliot Spitzer might press charges against them, Harold Baxter, chairman and chief executive officer of Pilgrim Baxter & Associates, and Gary Pilgrim, co-founder, quit their positions yesterday. An internal probe into investments by one of the two, also prompted their forced resignations.

The pair started their $7.4 billion company, now owned by Old Mutual, in 1974. Scott Powers, CEO of Old Mutual Asset Management, has replaced Baxter as chairman.

Old Mutual CEO Jim Sutcliffe told analysts on a conference call the insurer is optimistic that with the departures of the two, any problems relating to questionable trading has been put to an end.

"The investigation is still ongoing, and we are not at a point where we can give you absolute certainty, but we are at a point where we can give you our instinct that we have got to most of these issues," Sutcliffe said.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.