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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)
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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)
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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*
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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.
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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,
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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
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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
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Date Signature
George W. Karpus, President
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Name / Title
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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.
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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
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George W. Karpus
President
