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Heartland Advisors Responds To Fraud Charges Filed by SEC

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December 12, 2003 — Heartland Advisors said it is “extremely disappointed” that the SEC has filed allegations of fraud concerning the company’s discontinued junk bond funds, and that such charges are “not well founded.”

In a press release Heartland noted that the SEC’s complaint “relates to the events that we have previously disclosed to all of our shareholders. We will vigorously contest these allegations and believe we have a strong basis for our defense.”

Heartland also said that the specific allegation of insider trading with respect to the firm’s chief executive Bill Nasgovitz is “completely untrue,” citing that Nasgovitz and Heartland both owned “substantial portions” of the Bond Funds in question and “suffered losses alongside other shareholders when the funds declined in price.”

According to an SEC spokesman, the charges relate to conduct covering Heartland’s two junk bond funds — High Yield Municipal Bond Fund and Short-Duration High Yield Fund — which were placed into receivership by the Commission in March 2001.


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