UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17247 / November 27, 2001

Securities and Exchange Commission v. Heartland Group, Inc., Civil Action No. 01-C-1984 (Northern District of Illinois)

The Securities and Exchange Commission announced today that the receiver previously appointed to administer Heartland Group, Inc.'s High-Yield Municipal Bond Fund, Short Duration High-Yield Municipal Fund and Taxable Short Duration Municipal Fund (collectively the Funds) made a partial cash distribution of approximately $4 million to shareholders in the High-Yield Municipal Bond Fund, $1.3 million to shareholders in the Short Duration High-Yield Municipal Fund, and $1.8 million to shareholders in the Taxable Short Duration Municipal Fund. According to the receiver, the distribution was made over a two-day period on November 23 and 26, 2001 and resulted from the sale of securities held by the Funds.

In March 2001, the Honorable Judge Joan Humphrey Lefkow of the United States District Court for the Northern District of Illinois entered an Order enjoining Heartland Group, Inc. from further violations of Sections 30(b), (e) and (g) of the Investment Company Act and Rules 30b2-1, 30d-1(a) and 30d-1(c) promulgated thereunder; freezing the assets of the Funds until further court order; and appointing a receiver to manage the Funds, including, if appropriate, suspending redemptions in and liquidating the Funds. On November 1, 2001 Judge Lefkow approved the receiver's plan to engage in the partial distribution described above.