HOUSTON, Dec. 13, 2003 (PRIMEZONE) -- A class action lawsuit has been filed in United States District Court for the Eastern District of Pennsylvania, on behalf of all persons or entities who purchased or otherwise acquired PBHG family of funds (the "Funds") operated by the subsidiary of South African based financial services company, Old Mutual plc (LSE:OML), Old Mutual Asset Management and its member firm Pilgrim Baxter & Associates, Ltd. ("Pilgrim Baxter"), between November 24, 1998 and November 12, 2003 (the "Class Period"), inclusive. The complaint names Old Mutual Asset Management, Pilgrim Baxter, PBHG Funds, Gary L. Pilgrim, Harold J. Baxter, Appalachian Trails, L.P.; Michael Christiani; Wall Street Discount Corporation; Alan Lederfeind, each of the PBHG mutual funds, and John Does 1-100.
The Complaint alleges that defendants violated Sections 11 and 15 of the Securities Act of 1933; Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder; and Section 206 of the Investment Advisers Act of 1940. The Complaint charges that, throughout the Class Period, certain of the defendants failed to disclose that they improperly allowed certain hedge funds, such as Appalachian Trails, to engage in "late trading" and "timing" of the Funds' securities. Late trades are trades received after 4:00 p.m. EST that are filled based on that day's net asset value, as opposed to being filled based on the next day's net asset value, which is the proper procedure under SEC regulations. Late trading allows favored investors to make use of market-moving information that only becomes available after 4 P.M and has been compared to betting on a horse race that already has been run. Timing is excessive, arbitrage trading undertaken to turn a quick profit and which ordinary investors are told that the funds police. Late trading and timing injure ordinary mutual fund investors -- who are not allowed to engage in such practices -- and are acknowledged as improper practices by the Funds. In return for receiving extra fees from Appalachian Trails, Christiani, Alan Lederfeind, and clients of Wall Street Discount Corporation, and other favored investors, Old Mutual, and Pilgrim Baxter and its affiliates allowed and facilitated timing and late trading activities in the Funds, to the detriment of class members, who paid, dollar for dollar, for improper profits made by Appalachian Trails, Christiani, Alan Lederfeind, and clients of Wall Street Discount Corporation. These practices were undisclosed in the prospectuses of the Funds, which falsely represented that the Funds actively police against timing and represented that post-4 P.M. EST trades will be priced based on the next day's net asset value and that premature redemptions will be assessed a charge.
The Funds, and the symbols for the respective Funds named below, are as follows:
PBHG Growth Fund (Nasdaq: PBHGX), (Nasdaq: PBGWX), (Nasdaq: PAHGX), (Nasdaq: PCHGX) PBHG Emerging Growth Fund (Nasdaq: PBEGX), (Nasdaq: PAEGX), (Nasdaq: PCEGX) PBHG Large Cap Growth Fund (Nasdaq: PBHLX), (Nasdaq: PBLAX), (Nasdaq: PLCGX), (Nasdaq: PALGX), (Nasdaq: PCLGX) PBHG Select Growth Fund (Nasdaq: PBHEX), (Nasdaq: PAHEX), (Nasdaq: PCHEX) PBHG Focused Fund (Nasdaq: PBFVX), (Nasdaq: PAFCX), (Nasdaq: PCFCX) PBHG Large Cap Fund (Nasdaq: PLCVX), (Nasdaq: PBLVX), (Nasdaq: PLCAX), (Nasdaq: PCCAX) PBHG Large Cap 20 Fund (Nasdaq: PLCPX), (Nasdaq: PLTAX), (Nasdaq: PLGAX), (Nasdaq: PCLAX) PBHG Strategic Small Company Fund (Nasdaq: PSSCX), (Nasdaq: PBSSX), (Nasdaq: PSSAX), (Nasdaq: PCSSX) PBHG Disciplined Equity Fund (Nasdaq: PBDEX), (Nasdaq: PBOEX), (Nasdaq: PADEX), (Nasdaq: PCDEX) PBHG Mid-Cap Fund (Nasdaq: PBMCX), (Nasdaq: PMCAX), (Nasdaq: PMCVX), (Nasdaq: PAMIX), (Nasdaq: PCCPX) PBHG Small Cap Fund (Nasdaq: PBSVX), (Nasdaq: PVAAX), (Nasdaq: PSAMX), (Nasdaq: PSCMX) PBHG Clipper Focus Fund (Nasdaq: PBFOX), (Nasdaq: PCLFX), (Nasdaq: PAFOX), (Nasdaq: PCFOX) PBHG Small Cap Value Fund (Nasdaq: PSMVX), (Nasdaq: PACVX), (Nasdaq: PCCVX) PBHG REIT Fund (Nasdaq: PBRTX), (Nasdaq: PBRAX), (Nasdaq: PCRTX), (Nasdaq: PARTX) PBHG Technology & Communications Fund (Nasdaq: PBTCX), (Nasdaq: PTNAX), (Nasdaq: PTCHX), (Nasdaq: PATCX), (Nasdaq: PCOMX) PBHG IRA Capital Preservation Fund (Nasdaq: PBCPX), (Nasdaq: PACPX), Nasdaq: PIRAX), (Nasdaq: PIRCX) PBHG Intermediate Fixed Income Fund (Nasdaq: PBFIX), (Nasdaq: PAFIX), (Nasdaq: PCIRX) PBHG Cash Reserves Fund (Nasdaq: PBCXX)
If you purchased or otherwise acquired any of the Funds described above, between November 24, 1998 and November 12, 2003 and sustained damages, you may, no later than January 13, 2004, move the Court to serve as lead plaintiff. To serve as lead plaintiff, however, you must meet certain legal requirements. Contact plaintiff's counsel John G. Emerson or Scott Poynter of Emerson Poynter LLP to further discuss this action, this announcement, or your rights or interests. You may contact the firm by calling toll free to (800) 663-9817, by facsimile at (281) 488-8867, or by e-mail at shareholder@emersonfirm.com.
Emerson Poynter has substantial experience representing investors in securities fraud class actions and other complex corporate governance and consumer litigation. The firm has offices in Houston, Texas and Little Rock, Arkansas, but represents investors and consumers throughout the nation.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.