-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H0UYoAwPGjwwp9+FeBWpt+9ZK5KxTgHATJ5HpO6Ex1NpKB5F8jhZwa+rcnXJZ6TE oqYDA3DJ+X8sjdvdaPn80g== 0000889812-98-001437.txt : 19980610 0000889812-98-001437.hdr.sgml : 19980610 ACCESSION NUMBER: 0000889812-98-001437 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19980609 SROS: AMEX SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BULL & BEAR U S GOVERNMENT SECURITIES FUND INC CENTRAL INDEX KEY: 0001023714 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133907058 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-51849 FILM NUMBER: 98644499 BUSINESS ADDRESS: STREET 1: 11 HANOVER SQ CITY: NEW YORK STATE: NY ZIP: 10005 BUSINESS PHONE: 2127850900 MAIL ADDRESS: STREET 1: 11 HANOVER SQ CITY: NEW YORK STATE: NY ZIP: 10005 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KARPUS MANAGEMENT INC CENTRAL INDEX KEY: 0001048703 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 161290558 STATE OF INCORPORATION: NY FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 14 TOBEY VILLAGE OFFICE PARK CITY: PITTSFORD STATE: NY ZIP: 14534 BUSINESS PHONE: 7165864680 SC 13D/A 1 AMENDMENT NO. 7 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under (Rule 13d-101) of the Securities Exchange Act of 1934 (Amendment No. 7) BULL & BEAR U. S. GOVERNMENT SECURITIES FUND, INC. (Name of Issuer) Common Stock (Title of Class of Securities) 12017N105 (CUSIP Number) George W. Karpus, President Karpus Management, Inc. d/b/a Karpus Investment Management 14 Tobey Village Office Park Pittsford, New York 14534 (716) 586-4680 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 3, 1998 (Date of Event Which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of the Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. [ ] (page 1 of 7 Pages) (continued on following pages) (1 Exhibit Attached) SCHEDULE 13D CUSIP No. 12017N105 Page 2 of 7 pages 1 NAMES OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Karpus Management, Inc. d/b/a Karpus Investment Management I.D. # 16-1290558 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |x| 3 SEC USE ONLY 4 SOURCE OF FUNDS* AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York 7 SOLE VOTING POWER 119,250 shares NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY EACH 9 SOLE DISPOSITIVE POWER REPORTING 119,250 shares PERSON WITH 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 119,250 shares 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 16.28% 14 TYPE OF REPORTING PERSON* IA *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. ITEM 1 Security and Issuer Common Stock Bull & Bear U.S. Government Securities Fund, Inc. ("BBG") 11 Hanover Square New York, New York 10005 ITEM 2 Identity and Background a) Karpus Management, Inc. d/b/a Karpus Investment Management ("KIM") George W. Karpus, President, Director, & controlling stockholder JoAnn VanDegriff, Vice President and Director Sophie Karpus, Director b) 14 Tobey Village Office Park Pittsford, New York 14534 c) Principal business and occupation - Investment Management for individuals, pension and profit sharing plans, corporations, endowments, trusts and others, specializing in conservative asset management (i.e., fixed income investments). d) None of George W. Karpus, JoAnn VanDegriff or Sophie Karpus ( the "Principals") or KIM has been convicted in the past 5 years of any criminal proceeding (excluding traffic violations). e) During the last five years none of the principals or KIM has been a party to a civil proceeding as a result of which any of them is subject to a judgment, decree or final order enjoining future violations of or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. f) Each of the Principals is a United States citizen. KIM is a New York State corporation. ITEM 3 Source and Amount of Funds or Other Considerations. KIM, an independent investment advisor, has accumulated shares of BBG on behalf of accounts that are managed by KIM (the "Accounts") under limited powers of attorney. All funds that have been utilized in making such purchases are from such Accounts. ITEM 4 Purpose of Transaction The management of BBG has continuously stalled and evaded attempts by KIM to obtain a current list of shareholders. As a shareholder of over 5% of the outstanding shares and having held theses shares in excess of a six month period, KIM is entitled to inspect and copy BBG's stock ledger under Maryland General Corporation Law Section 2-1513 (a) (1). On February 19, 1998 KIM filed an action in the Circuit Court of Baltimore City to compel production of such list. Also on February 19, 1998, BBG filed an action against KIM in the United States District Court, Southern District, alleging certain violations of the Securities Exchange Act of 1934, as amended, and requesting a declaratory judgment that KIM is not entitled to the shareholder list. KIM has made a motion to dismiss this action and continues to assert its rights under Maryland law. KIM intends to explore all available alternatives to assert its rights as a shareholder of BBG and to cause management of BBG to act in the interests of BBG's shareholders. KIM has also requested an accounting of the costs of mailing of proxy materials from BBG in anticipation that BBG had overcharged KIM in this process. Once again, despite repeated attempts , BBG has not furnished or allowed access to records to which KIM is legally entitled. On April 2, 1998 KIM issued a formal proposal to be included in any and all proxy materials that will be distributed by the Fund. This proposal nominates Donald R. Chambers Ph.D. as the KIM candidate for the Board of Directors to be elected at the annual meeting. On May 27, 1998, KIM sent a letter to each member of the Board of Directors of the Fund voicing several concerns regarding the poor performance of the Fund, the constant discount to NAV at which the Fund trades, along with the increased expenses the Fund has experienced. (Refer to exhibit #1) KIM reserves the right to further acquire or dispose of Shares for its Accounts. KIM will from time to time purchase or sell shares depending on the needs of the Accounts. Liquidity needs, additions to Accounts, or realignment of risk level are all factors to be considered in transactions of Shares. None of the Principals presently intends to acquire Shares directly. ITEM 5 Interest in Securities of the Issuer a) As of the date of this Report, KIM owns 119,250 Shares which represents 16.28% of the outstanding Shares. None of the Principals owns any other Shares. b) KIM has the sole power to dispose of and to vote all of such Shares under limited powers of attorney. c) Open market purchases and sales in the last 60 days for the Accounts Price Per Date Shares Share 4/1/98 1,300 13.3125 5/13/98 700 12.75 5/14/98 1,100 12.75 5/14/98 1,000 12.6875 5/18/98 400 12.6875 5/26/98 200 12.6875 The open market purchase of 4/1/98 was entered on December 16, 1 1997 and executed at a price of $13.3125. 1.)There have been no dispositions and no acquisitions, other than by such open market purchases, during such period. 2.)The Accounts have the right to receive all dividends from, and any proceeds from the sale of the Shares. None of the Accounts has an interest in Shares constituting more than 5% of the Shares outstanding. ITEM 6 Contracts, Arrangements, Understandings, or Relationships with Respect to Securities of the Issuer. Except as described above, there are no contracts, arrangements understandings or relationships of any kind among the Principals and KIM and between any of them and any other person with respect to any of BBG securities. ITEM 7 Materials to be Filed as Exhibits Yes, 1 exhibit attached Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Karpus Management, Inc. June 3, 1998 By: /s/ GEORGE W. KARPUS - ------------ ------------------------- Date Signature George W. Karpus, President ------------------------- Name / Title EX-99.1 2 EXHIBIT 1 Exhibit 1 Mr. Douglas Wu Mr. Frederick A. Parker, Jr. 12 East 49th Street 219 East 69th Street New York, NY 10017 New York, NY 10021 Mr. Mark C. Winmill, Mr. Thomas B. Winmill & Mr. Bassett S. Winmill Bull & Bear US Government Bond Fund, Inc. 11 Hanover Square New York, NY 10005 Dear __________: Re: Bull & Bear U.S. Government Securities Fund. Karpus Investment Management, through it's various "accounts", represents a significant percentage of beneficial ownership in Bull & Bear U.S. Government Securities Fund, Inc. It is my fiduciary duty to the "accounts" to express my concerns regarding the poor performance of the Fund, the constant discount to NAV at which the Fund trades, along with the increased expenses the Fund has experienced. The August 23, 1996 proxy statement cited under Reasons for the Conversion - "The Directors believe that the Conversion will provide the Fund with greater flexibility to seek its investment objective with lower operating expenses" . I believe that this is a misleading and untrue statement contained in the proxy materials. According to the "Comparative Expense Tables of the Fund and Pro Forma of the New Fund", the pro forma expenses should equal 1.57% of the average net assets. Whereas the expenses for the fiscal year ending June 30, 1997 seemed reasonable and in line with the new policies, the expenses incurred from July 1 through December 31, 1997 have been disproportionately high. It is beyond comprehension how the Board could approve expenses for a six month time period of $245,504 which was more than the previous full years expenses. The Board, as a governing body of the Fund must take responsibility for these exorbitant expenses. Expenses must be kept within the guidelines established when the Fund was converted. As the largest shareholder of the Fund, the "accounts" are entitled to an itemized accounting of these expenses. I also believe that the Fund may be misstating its' net asset value. Management of the Fund had requested $7,500 from KIM to facilitate a complete mailing to all holders of the Fund in the last quarter of 1997. However a complete mailing was not performed. Based on a guideline for reasonable fees, Karpus Investment Management had been grossly overcharged. KIM has been seeking a refund of the amount overcharged, along with requesting a complete accounting of the expenditures that the Fund incurred in this process. If this "overcharged" amount is included in the reported net asset value calculation, there is the strong possibility that the Fund is reporting an erroneous net asset value. It is the duty of the Board of Directors to set forth proposals which improve the net asset performance of the Fund. From December 26, 1997 through May 22, 1998 the net asset value of the Fund returned an annual equivalent of -3.1468% (this excludes reinvestment of dividends). The Board must take steps to improve this performance. The Board also needs to address the constant discount to net asset value at which the Fund trades. From November 1, 1996 through May 22, 1998 the Fund has traded at an average discount of -13.63%. Through the first five months of 1998 the Fund has traded at an average discount of -10%. I believe that this discount has consistently been among the highest of any fund in the U.S. Government Bond Fund closed-end category. It is my belief that the inherent conflict of interest between the Board and the Fund Advisor is prohibiting the Fund from improving its investment return. The Advisor of the Fund has constantly under-performed the market and is consistently in the bottom percentage of managers. As reported in the Wall Street Journal (Wednesday, May 27, 1998) according to Lipper Analytical Services, Inc., Bull & Bear U.S. Government Securities Fund Inc. ranks as one of the bottom ten performers in the closed-end bond category . In my opinion, it is the fiduciary duty of each and every member of the Board of Directors to take appropriate steps to improve the performance of the Fund. Due to the consistently poor performance of the fund, the present advisor must be removed and be replaced with a manager who will deliver superior investment results to the shareholders. Sincerely, /s/ GEORGE W. KARPUS - ---------------------- George W. Karpus President -----END PRIVACY-ENHANCED MESSAGE-----