UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

Securities Exchange Act of 1934
Release No. 34-54073 / June 30, 2006

Administrative Proceeding File No. 3-11524

NOTICE OF PROPOSED DISTRIBUTION PLAN AND OPPORTUNITY FOR COMMENT

Notice is hereby given, pursuant to Rule 1103 of the Securities and Exchange Commission's ("Commission") Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. § 201.1103, that the Division of Enforcement has submitted to the Commission a proposed plan ("Distribution Plan") for the distribution of monies placed into Fair Funds in the above-captioned matter and in two other, related, matters: In the Matter of Gary L. Pilgrim, Admin. Proc. File No. 3-11739 (Nov. 17, 2004) (the "Pilgrim Order") and In the Matter of Harold J. Baxter, Admin. Proc. File No. 3-11740 (Nov. 17, 2004) (the "Baxter Order").

On June 21, 2004, in the above-captioned matter, the Commission issued an Order instituting and simultaneously settling public administrative and cease-and-desist proceedings against Pilgrim Baxter & Associates (the "PBA Order"). In the PBA Order, the Commission authorized and established a Fair Fund, comprised of disgorgement and penalties paid by PBA, for distribution to investors injured by market timing in Pilgrim Baxter mutual funds ("PBHG Funds") pursuant to a distribution plan developed by an Independent Distribution Consultant.

On November 17, 2004, in the Pilgrim Order and the Baxter Order, the Commission issued two orders simultaneously instituting and settling administrative and cease-and-desist proceedings against the former principals of Pilgrim, Baxter & Associates, Ltd ("PBA"), Gary L. Pilgrim ("Pilgrim") and Harold J. Baxter ("Baxter"). Among other things, the Commission authorized and established in each of these Orders a Fair Fund comprised of disgorgement and penalties paid by Pilgrim and Baxter, respectively, for distribution in accordance with the distribution plan developed pursuant to the PBA Order.

OPPORTUNITY FOR COMMENT

Pursuant to this Notice, all interested parties are advised that they may print a copy of the proposed Distribution Plan from the Commission's public website, http://www.sec.gov/litigation/admin/34-54073-pdp.pdf, a link to which will be provided on PBA's public website, http://www.pbhgfunds.com/inside/lrc.asp. Interested parties may also obtain a written copy of the proposed Distribution Plan by submitting a written request to Catherine E. Pappas, United States Securities and Exchange Commission, 701 Market Street, Suite 2000, Philadelphia, PA 19106. All persons who desire to comment on the Distribution Plan may submit their comments, in writing, no later than July 31, 2006:

1. to the Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549-1090;
    
2. by using the Commission's Internet comment form (http://www.sec.gov/litigation/admin.shtml); or
    
3. by sending an e-mail to rule-comments@sec.gov. Please include "Administrative Proceeding File Number 3-11524" on the subject line.

Comments received will be publicly available. Persons should submit only information that they wish to make publicly available.

THE DISTRIBUTION PLAN

The Distribution Plan provides for distribution to all eligible investors, for the period spanning June 1998 through December 2001, their proportionate share of the disgorgement and civil penalties paid by PBA, Pilgrim, and Baxter in connection with the orders referenced above to compensate such investors for injury they may have suffered as a result of market timing in PBHG Funds. The PBHG Funds are: Core Growth, Emerging Growth, Focus, Global Technology, Growth, International, Large Cap, Large Cap 20, Large Cap Growth, Limited, Mid-Cap, New Opportunities, Select Growth, Small-Cap, Strategic Small, and Technology & Communications. The aggregated Fair Fund of $250 million plus any accumulated interest (the "PBA Fair Fund") includes the $90 million paid by PBA and the $160 million paid by Pilgrim and Baxter. If the Distribution Plan is approved, eligible investors in the PBHG Funds would receive a pro rata share of the PBA Fair Fund as calculated by the Independent Distribution Consultant. The pro rata shares of the PBA Fair Fund would be determined based on information contained in PBA's records, as well as records obtained from third party intermediaries. Eligible investors would not need to go through a claims process.

For the Commission, by its Secretary, pursuant to delegated authority.

http://www.sec.gov/litigation/admin/2006/34-54073.htm