NEW YORK (CNN/Money) - Regulators said Wednesday that Harold J. Baxter and Gary L. Pilgrim, two investors charged with fraud in a mutual fund timing scandal, have settled for $160 million.

The Securities and Exchange Commission and New York Attorney General Eliot Spitzer said the two men will pay $20 million in civil penalties and $60 million in restitution apiece. That money will then be combined with the $90 million paid by Pilgrim, Baxter & Associates, Ltd. in June and be distributed to injured investors.

The agreement resolves allegations that the two men, who founded the mutual fund family PBHG, allowed favored clients to rapidly trade in and out of funds while the fund company's policy sharply limited individual shareholders' ability to do the same.

"The amounts being paid in this settlement are virtually unprecedented for individuals in civil cases," Stephen M. Cutler, director of the SEC's Division of Enforcement, said in a statement.

"As founders of a company that bore their names, Mr. Pilgrim and Mr. Baxter should have set an example of integrity and fair play," Spitzer said. "Instead, they were at the center of improper conduct that deceived and harmed their clients."

As part of the settlement, Baxter and Pilgrim must cooperate with any ongoing investigations and both are barred from future employment in the securities industry.

The SEC and Spitzer had filed a civil suit against PBHG, Pilgrim Baxter & Associates and Pilgrim and Baxter, claiming the firm allowed several hedge funds, including one that Pilgrim had a stake in, to trade in and out of the PBHG Growth fund, while the fund's prospectus barred other investors from doing so.

In June Pilgrim Baxter & Associates agreed to settle the suit by paying $40 million in restitution and a $50 million civil penalty.

Under the Sarbanes-Oxley Act of 2002, all penalties in certain corporate cases can now go directly to reimburse victims. Prior to the act, any money paid in a civil fine would have gone to government coffers.