CASES
Eaton Vance Tax- Advantaged Global Dividend Income Fund
Class Period: Mar 10, 2008 to Jun 22, 2010
Summary of Case:
A securities class action has been filed against Eaton Vance Tax- Advantaged Global Dividend Income Fund (ETG) (the "Fund") on behalf of all securities purchasers from March 10, 2008 through present ("Class Period), in the United States District Court of Massachusetts.
The complaint alleges that the Fund is a closed-end investment company organized as a Massachusetts business trust on November 14, 2003. The Fund raised money from the sale of its common shares, and the Fund invested that money in securities to earn a return for the common shareholders.
In addition to issuing the common stock held by the members of the putative class, the Fund issued auction rate preferred stock ("ARPS"). The ARPS bore a preferred dividend right, with the dividend rate reset periodically through an auction mechanism. In effect, the ARPS provided the Fund with long-term financing at short-term interest rates. The auction mechanism provided liquidity to the holders of ARPS, as they were able to sell their ARPS at auction. The ARPS also provided flexibility to the Fund as ARPS were subject to lower coverage ratios than debt, and had other favorable terms. As equity securities, the ARPS had no maturity and did not ever have to be repaid.
During 2008, the individual defendants caused the Fund to redeem the ARPS and replace it with less favorable debt financing. The individual defendants took these actions to further their own interests and those of the Fund's investment advisor and its affiliates, not the interests of the common shareholders, and thus they thereby breached the fiduciary duties owed to the Fund's common shareholders.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.