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Background of the Settlement
1. What is the Columbia Fair Fund all about?
In February 2005, affiliates of Bank of America reached a settlement with the
SEC under which a settlement fund was established for the benefit of
shareholders who may have been affected by short-term or excessive trading
activity in certain Columbia Funds from 1999 through 2003. In accordance with
the terms of the settlement, an Independent Distribution Consultant has
developed a plan to allocate and distribute the amounts paid as part of the
settlement to eligible investors who held shares in certain Columbia Funds
primarily during 1999 to 2003. [Note: Some distributions are to be made to
investors holding shares in the Young Investors Fund during 1998]. For more
information, a link to the Plan of Distribution is available by clicking on Helpful
Links.
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Settlement and Distribution
2. Why did the distribution of the settlement take so long?
On February 9, 2005, the SEC entered an order approving the settlement of the
administrative proceeding against Columbia Management Advisors, Inc. and
Columbia Funds Distributor, Inc. Shortly thereafter an Independent Distribution
Consultant was appointed to create a Plan of Distribution. The task of
developing the Plan was a long and complicated process. This initial Plan was
filed with the SEC for review, as were several later iterations of the Plan. In
July 2006, the Proposed Plan of Distribution was posted for public comment, and
on April 6, 2007, following amendments to the Plan responding to public
comments, the Plan was approved by the SEC.
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3. Can I read a copy of the distribution plan?
Yes. A copy of the Distribution Plan is available on the SEC website. A link to
the plan is available under Helpful Links.
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My Distribution
4. I hold shares of these funds through my broker. How will I receive
that payment?
Please contact your broker for details regarding your payment. If you are an
account holder of record between 1999 and 2003 in one of the funds eligible for
distribution under the Distribution Plan, you may be eligible for payment.
[Note that holders of Young Investors Fund shares in 1998 may also be
eligible.] For a list of eligible funds, please see the List of Funds under Helpful
Links. In any given fund there will be account holders identified for
whom the estimated distribution is so small that it would be impractical and
ineffective to send a check. In general, no distribution of less than $10 will
be made.
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5. My friend received a check in the mail. How do I know if I am going to
get a payment?
If you are an account holder of record between 1999 and 2003 in one of the
eligible funds, which are listed on the List of Funds under Helpful Links,
you may be eligible for payment. [Note that holders of Young Investors Fund
shares in 1998 may also be eligible.]
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6. How do I know if the fund I held shares in is one of the funds
eligible for a distribution?
For a list of eligible funds, please see the List of Funds under Helpful Links.
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7. My account has been closed for some time. How do I know that this
check is accurate?
The account and transaction history records were obtained for the period of
March 1, 1998 through December 30, 2003 and the allocations were completed
based on this historical data and the Plan of Distribution.
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8. How was my distribution calculated?
The calculations are based on several factors, such as fund class, fund class
values, account balances and overall trading activity, as well as other
variables. The calculations are very complex and it would be difficult to
provide an algorithm that could be applied to each individual. In general,
though, the amount of a distribution depends on the extent of a holder’s share
balance and the extent and profitability of short-term or excessive trading
activity during the period in which the holder held shares.
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9. Can you provide an algorithm of how the distribution amount was
derived?
The methodology for determining the distribution amount is defined in the Plan
of Distribution, which is available on the SEC website. A link to the Plan of
Distribution is available by clicking on Helpful Links. In general, though, the
amount of a distribution depends on the extent of a holder’s share balance and
the extent and profitability of short-term or excessive trading activity during
the period in which the holder held shares.
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10. I also have shares in fund X and this does not appear to be included
in my distribution. Why?
Under the methodology in the Plan of Distribution, if you owned one of the
Columbia funds listed on the List of Funds under Helpful Links that has
either been closed or merged into another fund during the period of 1999 to
2003, you may be eligible to receive a distribution. [Note that holders of
Young Investors Fund shares in 1998 may also be eligible.] For a full
explanation of how the distribution amounts were calculated, please see the
Plan of Distribution. A link to the Plan of Distribution is available by
clicking on Helpful Links.
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11. My fund holdings are through my retirement plan at work (a broker or
another financial intermediary), but they should still be eligible. How can I
make sure that I am getting payment for all funds in my distribution?
Please contact your account broker or other financial intermediary. According
to the Distribution Plan, financial intermediaries of retirement accounts are
required to distribute the monies received under the Plan of Distribution in
accordance with their fiduciary and contractual obligations, and consistent
with guidance issued by the Department of Labor.
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12. How did you decide which funds were eligible and which funds were
not eligible?
The funds that were classified as eligible to receive distributions are those
funds that were determined to have been most affected by short-term or
excessive trading activity during the relevant time period. A list of those
funds can be found under List of Funds under Helpful Links.
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13. I am sure that I am eligible for more of a payment. What do I need
to do to dispute the amount?
Please contact the Fund Administrator at 1-800-410-5361 with questions. The
hours of the call center are 8:00 a.m. to 5:00 p.m., Central Time.
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14. I know that I should have gotten a payment, but I never received
one. Who should I contact?
Please contact the Fund Administrator at 1-800-410-5361 with questions. The
hours of the call center are 8:00 a.m. to 5:00 p.m., Central Time.
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15. I hold shares of these funds through my employer’s 401(k) plan. Will
I receive an additional amount?
Any eligible amounts will be distributed as required by the Plan of
Distribution. Please contact your plan administrator for details regarding your
distribution.
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Tax Information
16. Is this payment taxable?
Before you deposit or otherwise negotiate this check, it is very important that
you understand the tax implications that may arise in connection with this
payment. Prior to depositing or negotiating the check, please review the Statement
to Eligible Investors available on this website. It is also
important that you consult with your tax advisor.
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Change of Name or Address
17. I just got married and changed my name. Can I still cash my check?
When you go to the bank to cash the check, you may need to bring supporting
documentation such as a copy of your marriage certificate or a copy of a court
approved name change document with you. For specific instructions, please
contact your bank.
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18. I have recently gotten a divorce and changed my name. Can I still
cash my check?
When you go to the bank to cash the check, you may need to bring supporting
documentation such as a copy of your divorce decree or a copy of a court
approved name change document with you. For specific instructions, please
contact your bank.
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19. I didn’t receive a distribution, but think the reason is because
I’ve moved. How can I find out?
Please contact the Fund Administrator at 1-800-410-5361 with questions. The
hours of the call center are 8:00 am. to 5:00 p.m., Central Time.
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20. I received a check made payable to my relative who is now deceased –
what do I do?
Please contact the Fund Administrator at 1-800-410-5361 with questions. The
hours of the call center are 8:00 am. to 5:00 p.m., Central Time.
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21. I received a check made payable to an entity (trust, corporation,
partnership, etc) that no longer exists. What do I do?
Please contact the Fund Administrator at 1-800-410-5361 to discuss your
specific situation.
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22. I received a check but lost it. How can I replace the check?
Please contact the Fund Administrator at 1-800-410-5361. A stop pay will need
to be initiated on your current check and a new check will be reissued. The
reissue process will take approximately 2-3 weeks.
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23. Can the proceeds from the settlement be invested back into my
account?
Please contact your account broker or other financial intermediary for details.
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IRA or Tax-Qualified Retirement Plans
24. I received a check associated with an IRA account. Can I cash the
check?
Before you deposit or otherwise negotiate this check, it is very important that
you understand the tax implications that may arise in connection with this
payment. Prior to depositing or negotiating the check, please review the Statement
to Eligible Investors available on this website. It is also
important that you consult with your tax advisor.
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25. I received a check associated with qualified retirement plan. What
should I do with the check?
Before you deposit or otherwise negotiate this check, it is very important that
you understand the tax implications that may arise in connection with this
payment. Prior to depositing or negotiating the check, please review the Statement
to Eligible Investors available on this website. It is also
important that you consult with your tax advisor.
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