Gary L. Pilgrim, et al.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19421 / October 11, 2005

Securities and Exchange Commission v. Gary L. Pilgrim, et al., Civil Action No. 03-CV-6341 (E.D. Pa.)

DISTRICT COURT CASE RESOLVED WITH RESPECT TO GARY L. PILGRIM AND HAROLD J. BAXTER

On February 23, 2005, the Honorable Harvey Bartle III granted the Commission's motion for voluntary dismissal of its civil injunctive action against the remaining two defendants, Gary L. Pilgrim and Harold J. Baxter. Securities and Exchange Commission v. Gary L. Pilgrim, et al., Civil Action No. 03-CV-6341 (E.D. Pa.). The Commission's action was dismissed with prejudice.

The dismissal was part of the Commission's settlement with Messrs. Pilgrim and Baxter pursuant to which the Commission issued two settled administrative and cease-and-desist orders (the Commission's Orders). In the Matter of Gary L. Pilgrim, Admin. Proc. No. 3-11739 (November 17, 2004); In the Matter of Harold J. Baxter, Admin. Proc. No. 3-11740 (November 17, 2004). The Commission's Orders ordered Baxter and Pilgrim to each pay $60 million in disgorgement and $20 million in civil penalties, to cease and desist from committing and/or causing certain securities laws violations; to cooperate in ongoing investigations; and imposed broad restrictions any future employment in the securities industry. Messrs. Pilgrim and Baxter consented to the issuance of the Commission Orders without admitting or denying any of the findings contained therein.

On July 20, 2004, Judge Bartle granted the Commission's motion for voluntary dismissal of its civil injunctive action against Pilgrim, Baxter & Associates, Ltd. (PBA). This dismissal was part of the Commission's settlement with PBA pursuant to which the Commission issued a settled administrative and cease-and-desist order (the PBA Order). In the Matter of Pilgrim Baxter & Associates, Ltd., Admin. Proc. No. 3-11524 (June 21, 2004). The PBA Order censured PBA; imposed on PBA an order to cease and desist; ordered PBA to complete certain undertakings; and ordered PBA to pay disgorgement in the amount of $40,000,000 and a civil penalty in the amount of $50,000,000, for a total payment of $90,000,000, to be distributed pursuant to Section 308(a) of the Sarbanes Oxley Act of 2002. PBA consented to the issuance of the Order without admitting or denying any of the findings contained therein.

For further information about the civil and administrative proceedings, see Litigation Release No. 18474 (November 20, 2003) and Administrative Proceeding Files Nos. 3-11524 (June 21, 2004), 3-11739 (November 17, 2004), 3-11740 (November 17, 2004).