Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Portfolio > Mutual Funds

Class Action Lawsuit Filed against Appalachian Trails and Pilgrim

By Staff Writer

X
Your article was successfully shared with the contacts you provided.

NEW YORK (HedgeWorld.com)–Milberg Weiss Bershad Hynes & Lerach LLP named hedge fund Appalachian Trails and its co-founder and general partner as defendants in a class-action lawsuit filed Tuesday in the Eastern District of Pennsylvania.

The lawsuit, on behalf of investors in 18 PBHG mutual funds, also names the funds’ manager, Pilgrim Baxter & Associates Ltd., Wayne, Pa.; Pilgrim Baxter founder Gary L. Pilgrim and Harold J. Baxter; Wall Street Discount Corp. and its head; each of the PBHG mutual funds; and 100 unnamed individuals involved in the alleged mutual fund timing trades.

Milberg has been involved in a number of other mutual fund cases, according to an announcement from the firm. Firms such as Janus, Strong Funds, Putnam Mutual Funds and Bank One are mentioned.

New York State Attorney General Eliot Spitzer filed a compliant last week against Pilgrim Baxter in an ongoing mutual fund timing investigation that involves Mr. Pilgrim. Mr. Pilgrim was the manager of the PBHG Growth fund and at the same time was among the first investors in Appalachian Trails LP and maintained a substantial ownership interest in Appalachian .

Mr. Spitzer’s compliant alleges that, with the knowledge and consent of Chairman and CEO Harold Baxter, Appalachian was allowed to “feverishly” trade in and out of the PBHG Growth Fund and to trade in other funds. The New York State Attorney General’s office also charges that Appalachian made trades on nearly 100 exchanges into and out of the PBHG Growth Fund in 2000 and 2001, resulting in shareholders in the PBHG Growth fund possibly losing more than 60% of their investment.

Milberg’s lawsuit names Appalachian Trails’ Michael Christiani as co-founder, general partner and manager of Appalachian Trails and “an active participant in the unlawful scheme.”

The complaint also places the blame on false information generated from Pilgrim Baxter. The mutual fund’s prospectus states that the firm “actively safeguards shareholders from the harmful effects of timing,” according to Milberg. Attorney’s characterized the mutual fund company’s policy as one of “selective enforcement.”

[email protected]

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.