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Case Status:    DISMISSED    
On or around 09/22/2008 (Stipulation and order of dismissal (voluntary dismissal))

Filing Date: April 21, 2008

The complaint charges Calamos Fund with violations of the Securities Act of 1933. Calamos Fund is a closed-end management investment company. The Fund’s investment objective is to generate a high level of current income, with a second objective of capital appreciation.

According to the complaint, on or about September 17, 2007, the Fund filed its Prospectus for the Offering, which forms part of the Registration Statement, and $350 million worth of the Fund's ARPS were sold to the public at $25,000 per share.

The complaint alleges that the Registration Statement contained untrue statements of material fact or omitted to state other facts necessary to make the statements made therein not misleading and was not prepared in accordance with applicable SEC rules and regulations. Specifically, the true facts which were omitted from the Registration Statement were that: (i) the purported “auctions” used by Calamos Fund to get the dividend rates were not bona fide auctions at all, but rather a mechanism to maintain the illusion of an efficient and liquid market for the ARPS so that the Calamos Fund could continue to earn fees from the so-called auctions and from the ongoing stabilizing of the market because of the lack of buyer demand; (ii) the default interest rate set as a consequence of a failed auction is less than the interest rate paid when auctions of certain competing municipal auction rate securities (“MARS”) offered directly by municipal issuers fail; (iii) the ARPS suffer from an additional disadvantage compared to MARS because the ARPS are securities which exist in perpetuity until such time as the Fund calls them due while MARS have a set due date; and (iv) the default interest rate as set would cause the ARPS to trade at a discount to their par value if, and when, the auctions began to fail.

In the past few months, the market for auction rate securities has collapsed, as all of the major broker-dealers have announced that they will no longer purchase auction rate securities for their own accounts to ensure that the auctions do not fail. In the past month, thousands of auctions run by the broker-dealers failed. As a result, over $350 billion in auction rate securities that were once offered as “cash equivalents” are now illiquid, resulting in economic losses and severe hardships for investors.

NOTE: This class action was brought on behalf of all persons who acquired the Auction Rate Cumulative Preferred Shares of the Calamos Global Dynamic Income Fund pursuant and/or traceable to a false and misleading registration statement and prospectus issued in connection with the Company’s September 2007 offering.

On September 22, 2008, the parties in the action agreed to dismiss the action. The plaintiff voluntarily dismissed the action with prejudice.


Sector: Financial
Industry: Misc. Financial Services
Headquarters: United States


Ticker Symbol: CHW
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data

"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 08-CV-3756
JUDGE: Hon. Alvin K. Hellerstein
DATE FILED: 04/21/2008
CLASS PERIOD END: 04/21/2008
  1. Abraham, Fruchter & Twersky (New York, One Pennsylvania Plaza)
  2. Coughlin Stoia Geller Rudman & Robbins LLP (Melville)
  3. Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
No Document Title Filing Date
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