<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 13)
BULL & BEAR U. S. GOVERNMENT SECURITIES FUND, INC.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
12017N 105
(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)
November 30, 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 this
Schedule 13D, and is filing this schedule because of
Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. [ ]
(Continued on following pages)
(Page 1 of 6 Pages)
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SCHEDULE 13D
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CUSIP No. 12017N105 Page 2 of 6 Pages
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1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
KARPUS MANAGEMENT, INC. d/b/a KARPUS INVESTMENT MANAGEMENT
I.D. # 16-1290558
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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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
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NUMBER OF 7 SOLE VOTING POWER
SHARES 116,150 Shares
BENEFICIALLY
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OWNED BY EACH 8 SHARED VOTING POWER
REPORTING None
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PERSON WITH 9 SOLE DISPOSITIVE POWER
116,150 Shares
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10 SHARED DISPOSITIVE POWER
None
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
116,150 Shares
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
/ /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.46%
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14 TYPE OF REPORTING PERSON*
IA
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Page 2 of 6
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ITEM 1. Security and Issuer.
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Common Stock (the "Shares")
Bull & Bear U.S. Government Securities Fund, Inc. (the "Fund")
11 Hanover Square
New York, New York 10005
ITEM 2. Identity and Background.
-----------------------
No change.
ITEM 3. Source and Amount of Funds or Other Considerations.
--------------------------------------------------
KIM, an independent investment advisor, has purchased Shares on
behalf of client accounts that are managed by KIM (the "Accounts")
under limited powers of attorney. All funds that have been used in
making such purchases are from the Accounts.
ITEM 4. Purpose of Transaction.
----------------------
Initially, Karpus Investment Management ("KIM") purchased Shares for
investment purposes only. The profile of the Fund, being a conservative, high
credit quality fixed income fund, met the investment criteria of the Accounts.
The poor performance of the Fund (Lipper Analytical Services cited
the Fund to be in the bottom 10 performers in the Closed-End Bond Category, "The
Wall Street Journal," June 30,1998 issue), coupled with uncontrolled expenses,
has forced KIM to take steps which may lead to the termination of the contract
of the investment manager of the Fund. On November 20, 1998 KIM issued a
definitive proxy statement which, among other things, seeks the termination of
the Investment Management Agreement dated September 12, 1996, as the same may
have been amended, extended or restated, between Bull & Bear Advisers, Inc. and
the Fund at the Fund's 1998 annual meeting of stockholders (the "Meeting"). KIM
is not proposing a substitute manager to the Fund.
KIM is also asking stockholders to withhold authority to vote for the
Fund's nominee for Director, Frederick A. Parker, Jr., to vote against
ratification of the Fund's auditors and to vote against a name change of the
Fund to Bexil Corporation.
KIM believes that the Board has approved actions that are not in the
best interest of the stockholders. The Fund's Management recommended changing
the Fund's format from open end to closed end in 1996. This has resulted in the
Fund trading at a substantial discount to net asset value. (The average price
discount to net asset value has been - 10.21% for the time period of November
14, 1997 through December 4, 1998.)
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The Board has proposed in September of 1997 and in July of 1998 in
preliminary proxy statements to change the Fund to a non-diversified fund with a
50/50 "balanced" approach. This change would have required a vote of the
stockholders, since it would have changed the fundamental investment policy of
the Fund. KIM opposed these proposals, which were abandoned by the Fund. Instead
the Fund announced on August 17, 1998 its intention to invest up to 35% of its
assets in equity and other securities, commencing October 19, 1998. The Fund
intends to implement this change without stockholder approval.
It is the opinion of KIM that Bull & Bear Advisers, Inc. is a poor
equity manager. Bull & Bear Advisers' three funds listed in "The Wall Street
Journal," that invest in stocks and other investments, are all losing between
15% and 24% year-to-date (10/5/98). All three funds captioned in the Bull & Bear
Group are ranked in the bottom quintile for 1, 3, and 5 year periods according
to the most recent report of "The Wall Street Journal."
Poor Fund performance coupled with uncontrolled expenses prompted KIM
to oppose Management's candidate for director. KIM believes that the Board of
Directors should work for the stockholders.
The Fund's Management is also proposing that the stockholders amend
the Fund's Articles of Incorporation to change the Fund's name. Pursuant to its
recent announcement, up to 35% of the Fund's total assets may be invested in
equity securities, fixed income securities, money market instruments, and
securities of other investment companies to the extent consistent with its
investment objective. Issuers of these securities may include U.S. and foreign
entities, including small capitalization companies, private companies and
companies that invest or deal in natural resources or commodities. Equity
securities include common stocks, preferred stocks, securities that are
convertible into common stocks, depositary receipts, and warrants. The value of
the Fund's investment in certain equity securities may be affected by changes in
the price of precious metals, such as gold, platinum and silver. KIM believes
that these securities would be far too volatile to be contained in this Fund.
KIM believes that Bull & Bear Advisers, in light of their dismal record in
managing equities and other investment, should not be entrusted to buy equities
for the Fund and that stockholders should reject the name change purposed by the
Fund's Management.
KIM has repeatedly voiced its opinion to the Fund's Management that
these changes are not in the best interest of the stockholders of the Fund. It
is the opinion of KIM that this more "balanced" approach could lead to further
widening of the discount to net asset value at which the Fund currently trades.
The Accounts are managed by individual investment guidelines, which
may restrict or prohibit certain of the Accounts from investing in equity and
other types of securities. KIM believes that if the Accounts were forced to sell
a substantial number of Shares over a limited period of time, this would
materially adversely effect the market price of the Fund's shares, and may
create further losses for stockholders. On October 21, 1998 KIM wrote to Steven
Landis with various questions regarding the portfolio. On November 9,1998, KIM
made a second
Page 4 of 6
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request to Mr. Landis, as the first request had gone unanswered. Once KIM
receives a reply to its inquiry, it will take appropriate actions with respect
to each of the Accounts.
KIM reserves the right to acquire or to dispose of Shares prior to or
following the Meeting. Any such acquisition or disposition may be based, among
other factors, upon the amount of any discount from the Fund's net asset value
to the trading price of the Shares, excess liquidity or a need for liquidity in
any of the Accounts, and a comparison of the Fund's portfolio with the
investment guidelines of the Accounts.
On February 19, 1998, the Fund filed an action against KIM in the
United States District Court, Southern District of New York (Civil Action No 98
Civ. 1190) alleging that KIM had violated Section 16(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 under such Act. KIM has repeatedly and
vigorously denied these allegations, which it believes to be lacking merit. The
Fund made a motion on October 28,1998 seeking permission of the Court to file a
First Amended Complaint. In this proposed Amended Complaint the Fund demands,
among other things, that "KIM will immediately divest its client's holdings in
BBG, in excess of 3%, on a schedule to be determined by the Court, not to exceed
six months, to protect BBG and its investors from any negative financial impact
on BBG caused by KIM's breaches of the anti-pyramiding rule." ("The
anti-pyramiding" rule refers to the Investment Company Act, Section 12 (d) (1)
(A), 15 U.S. C. 80a-12(d) (1)(A), which provides in relevant part: "It shall be
unlawful for any .... investment company .... to purchase or otherwise acquire
any security issued by any registered investment company ("the acquired
company"), if the acquiring company and any company or companies controlled by
it immediately after such purchase or acquisition own in the aggregate: (i) More
than three per centum of the total outstanding voting stock of the acquired
company ..."). KIM believes that this claim is completely without merit, as KIM
is a registered investment adviser, not an investment company. KIM believes the
proposed divestiture would cause more harm to stockholders than any claims that
are alleged in the Fund's complaint. The outcome of this action can not be
predicted with certainty.
ITEM 5. Interest in Securities of the Issuer
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a) As of the date of this Report, KIM owns 116,150 Shares, which
represent 15.46% of the outstanding Shares. None of the
principals of KIM owns any other Shares.
b) KIM has the sole power to dispose of and to vote all of the
Shares held by the Accounts under limited powers of attorney.
c) Open market sales of the Accounts:
Page 5 of 6
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Date Shares Price Per Share
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11/30/98 (1,700) $14.00
11/30/98 (1,000) $13.75
12/1/98 (400) $13.75
d) 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
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to Securities of the Issuer.
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No change.
ITEM 7. Materials to be Filed as Exhibits.
---------------------------------
None.
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.
December 9, 1998
---------------------------
(Date)
KARPUS MANAGEMENT, INC.
George W. Karpus,
President
/s/ George W. Karpus
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(Signature)
George W. Karpus, President
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(Name/Title)
Page 6 of 6
