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Columbia Seligman Premium Technology Growth Fund Announces First Quarter Distribution: 9.25% Annual Rate for IPO Investors

Mish Boyka

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Columbia Seligman Premium Technology Growth Fund Announces First Quarter Distribution: 9.25% Annual Rate for IPO Investors

 

BOSTON – (BUSINESS WIRE) – Today, Columbia Seligman Premium Technology Growth Fund, Inc. (NYSE: STK) (the Fund) declared a first-quarter distribution, pursuant to its managed distribution policy, in the amount of $ 0.4625 per share, which is equal to a quarterly rate of 2.3125% (9.25% annualized) of the $ 20.00 offering price in the Fund’s initial public offering in November 2009. The first-quarter distribution of $ 0.4625 per share is equal to a quarterly rate of 1.6619% (6.65% annualized) of the Fund’s market price of $ 27.83 per share as of January 31, 2021.

The distribution will be paid on February 23, 2021 (the Payment Date) to Stockholders of record on February 16, 2021. The ex-dividend date is February 12, 2021. It is anticipated that the Fund will make a subsequent distribution under its managed distribution policy in the month of May.

Prior to the managed distribution policy, the Fund paid distributions pursuant to a level rate distribution policy. Under its former distribution policy and consistent with the Investment Company Act of 1940, as amended, the Fund could not distribute long-term capital gains more often than once in any one taxable year.

In October 2010, the Fund received exemptive relief from the Securities and Exchange Commission that permits the Fund to make periodic distributions of long-term capital gains more often than once in any one taxable year. After consideration by the Fund’s Board, the Fund adopted the current managed distribution policy which allows the Fund to make periodic distributions of long-term capital gains.

The following table sets forth the estimated breakdown of the distribution noted above, on a per share basis, from the following sources: net investment income; net realized short-term capital gains; net realized long-term capital gains; and return of capital or other capital source.

Breakdown of Distribution

Sources

%

US Dollar

Net Investment Income 0.00%

$ 0.0000
Net Realized Short-Term Capital Gains 15.50%

$ 0.0717
Net Realized Long-Term Capital Gains 84.50%

$ 0.3908
Return of Capital or other Capital Source 0.00%

$ 0.0000
Total 100.00%

$ 0.4625

The following table sets forth the estimated breakdown, on a per share basis, of all distributions made by the Fund during the year-to-date period ended on the Payment Date (includes the dividend payment noted in the table above) from the following sources: net investment income; net realized short-term capital gains; net realized long-term capital gains; and return of capital or other capital source.

Breakdown of All Distributions Paid Through

Year-To-Date Period Ended on the Payment Date

Sources

%

US Dollar

Net Investment Income 0.00%

$ 0.0000
Net Realized Short-Term Capital Gains 15.50%

$ 0.0717
Net Realized Long-Term Capital Gains 84.50%

$ 0.3908
Return of Capital or other Capital Source 0.00%

$ 0.0000
Total 100.00%

$ 0.4625

Historically, the Fund has distributed more than its income and net realized capital gains, which has resulted in Fund distributions substantially consisting of return of capital or other capital source. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” As of the payment date of the current distribution, all Fund distributions paid in 2021 (as estimated by the Fund based on current information) are from the earnings and profits of the Fund and not a return of capital. This could change during the remainder of the year, as further described below.

The amounts, sources and percentage breakdown of the distributions reported above are only estimates and are not being provided for, and should not be used for, tax reporting purposes. The actual amounts, sources and percentage breakdown of the distribution for tax reporting purposes, which may include return of capital, will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations.

The following table sets forth (i) the average annual total return of a share of the Fund’s common stock at net asset value (NAV) for the 5-year period ended January 31, 2021 and (ii) the Fund’s annualized distribution rate, for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at January 31, 2021.

Average Annual Total NAV Return for the 5-year Period Ended January 31, 2021 25.31%
Annualized Distribution Rate as a Percentage of January 31, 2021 NAV Price

(For the 5-year Period ended January 31, 2021)

6.76%

The following table sets forth (i) the average annual total return of a share of the Fund’s common stock at net asset value (NAV) for the period since inception of Fund investment operations through the period noted and (ii) the Fund’s annualized distribution rate , for the same period, expressed as a percentage of the NAV price of a share of the Fund’s common stock at January 31, 2021. Average annual total return of a share of the Fund’s common stock at NAV for the period since inception of Fund Investment operations through the period noted includes the 4.50% sales load assessed to IPO investors.

Average Annual Total NAV Return for the Period Since Inception of Investment

Operations (November 30, 2009) Through January 31, 2021

15.33%
Annualized Distribution Rate as a Percentage of January 31, 2021 NAV Price

(For the Period Since Inception of Investment Operations (November 30, 2009) through January 31, 2021)

6.59%

The following table sets forth (i) the cumulative total return (at NAV) of a share of the Fund’s common stock for the year-to-date period ended January 31, 2021 and (ii) the Fund’s distribution rate, for the same period , expressed as a percentage of the NAV price of a share of the Fund’s common stock at January 31, 2021.

Cumulative Total NAV Return for the Year-to-Date Period Ended January 31, 2021 3.20%
Distribution Rate as a Percentage of January 31, 2021 NAV Price

(For the Year-to-Date Period Ended January 31, 2021)

0.00% – N / A – no distributions made during this period

You should not draw any conclusions about the Fund’s investment performance from the amount of the distributions noted in the tables above or from the terms of the Fund’s distribution policy.

The Fund or your financial professional will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions on your US federal income tax return. For tax purposes, the Fund is required to report unrealized gains or losses on certain non-US investments as ordinary income or loss, respectively. Accordingly, the amount of the Fund’s total distributions that will be taxable as ordinary income may be different than the amount of the distributions from net investment income reported above.

The Board may change the Fund’s distribution policy and the amount or timing of the distributions, based on a number of factors, including, but not limited to, the amount of the Fund’s undistributed net investment income and net short- and long-term capital gains and historical and projected net investment income and net short- and long-term capital gains.

The Fund is a closed-end investment company that trades on the New York Stock Exchange.

Past performance does not guarantee future results.

Important Disclosures:

Investors should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. You can obtain the Fund’s most recent periodic reports and other regulatory filings by contacting your financial advisor or visiting www.columbiathreadneedleus.com. These reports and other filings can also be found on the Securities and Exchange Commission’s EDGAR Database. You should read these reports and other filings carefully before investing.

The Fund expects to receive all or some of its current income and gains from the following sources: (i) dividends received by the Fund that are paid on the equity and equity-related securities in its portfolio; and (ii) capital gains (short-term and long-term) from option premiums and the sale of portfolio securities. It is possible that the Fund’s distributions will at times exceed the earnings and profits of the Fund and therefore all or a portion of such distributions may constitute a return of capital as described below. A return of capital is a return of your original investment. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the Fund’s distribution policy.

Distributions that qualify as a return of capital are a return of some or all of your original investment in the Fund. A return of capital reduces a stockholder’s tax basis in his or her shares. Once the tax basis in your shares has been reduced to zero, any further return of capital may be taxable as capital gain. Shareholders should consult their tax advisor or tax attorney for proper treatment.

Distributions may be variable, and the Fund’s distribution rate will depend on a number of factors, including the net earnings on the Fund’s portfolio investments and the rate at which such net earnings change as a result of changes in the timing of, and rates at which , the Fund receives income from the sources noted above. As portfolio and market conditions change, the rate of dividends on the shares and the Fund’s distribution policy could change. The Board may change the Fund’s distribution policy and the amount or timing of the distributions, based on a number of factors, including, but not limited to, the amount of the Fund’s undistributed net investment income and net short- and long-term capital gains and historical and projected net investment income and net short- and long-term capital gains.

The market prices of technology and technology-related stocks tend to exhibit a greater degree of market risk and price volatility than other types of investments. These stocks may fall in and out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices. These stocks may also be adversely affected by changes in technology, consumer and business purchasing patterns, government regulation and / or obsolete products or services. Technology and technology-related companies are often smaller and less experienced companies and may be subject to greater risks than larger companies, such as limited product lines, markets and financial and managerial resources. These risks may be heightened for technology companies in foreign markets.

Investment products are not federally or FDIC-insured, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.

The Fund’s use of derivatives introduces risks possibly greater than the risks associated with investing directly in the investments underlying the derivatives. A relatively small price movement in an underlying investment may result in a substantial gain or loss.

The Fund should only be considered as one element of a complete investment program. An investment in the Fund should be considered speculative. The Fund’s investment policy of investing in technology and technology-related companies and writing call options involves a high degree of risk.

There is no assurance that the Fund will meet its investment objectives or that distributions will be made. You could lose some or all of your investment. In addition, closed-end funds frequently trade at a discount to their net asset values, which may increase your risk of loss.

Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies.

The Columbia Seligman Premium Technology Growth Fund is managed by Columbia Management Investment Advisers, LLC. This material is distributed by Columbia Management Investment Distributors, Inc., member FINRA.

© 2021 Columbia Management Investment Advisers, LLC. All rights reserved.

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Vermont Health Connect had 10 data breaches last winter

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Vermont Health Connect had 10 data breaches last winter
Vermont Health Connect has set up a special enrollment period in response to the coronavirus outbreak. VHC photo

In mid-December, a Vermont Health Connect user was logging in when the names of two strangers popped up in the newly created account.

The individual, who was trying to sign up for health insurance, deleted the information that had suddenly appeared.

“It was super unsettling to think that someone is filing in my account with my information,” the person, whose name is redacted in records, wrote in a complaint to the Department of Vermont Health Access. “Just seems like the whole thing needs a big overhaul.”

It was one of 10 instances between November and February when Vermont Health Connect users reported logging to find someone else’s information on their account.

The data breaches included names of other applicants and, in some cases, their children’s names, birth dates, citizenship information, annual income, health care plans, and once, the last four digits of a Social Security number, according to nearly 900 pages of public records obtained by VTDigger. On Dec. 22, the department’s staff shut down the site to try to diagnose the problem.

While officials say the glitches have been resolved, it’s the most recent mishap for a system that has historically been plagued by security and technical issues. The breaches could be even more widespread: Administrators of Vermont Health Connect can’t tell if other, similar breaches went unreported.

“We don’t know what we don’t know,” said Jon Rajewski, a managing director at the cybersecurity response company Stroz Friedberg. Regardless of whether there are legal ramifications for the incidents, they should be taken “very seriously,” he said.

“If my data was being stored on a website that was personal, — maybe it contains names or my Social Security number, like my status of insurance… — I would expect that website to secure it and keep it safe,” he said.

“I wouldn’t want someone else to access my personal information.”

Andrea De La Bruere, executive director of the Agency of Human Services, called the data breaches “unfortunate.” But she downplayed the severity of the issues. Between November and December, 75,000 people visited the Vermont Health Connect website for a total of 330,000 page views, she said. The 10 incidents? “It’s a very uncommon thing to have happen,” she said.

De La Bruere said the issue was fixed on Feb. 17, and users had reported no similar problems since. The information that was shared was not protected health information, she added, and the breaches didn’t violate the Health Insurance Portability and Accountability Act, or HIPAA.

“No matter what the law says technically, whether it’s HIPAA-related or just one’s personal information, it’s really concerning,” said Health Care Advocate Mike Fisher.

The timing of the issue is less than ideal, he added. Thousands of Vermonters will be logging into Vermont Health Connect in the coming weeks to take advantage of discounts granted by the American Rescue Plan. “It’s super important that people can access the system, and that it’s safe and secure,” Fisher said.

A ‘major issue

The issues first arose on Nov, 12, when at least two Vermonters logged in and found information about another user, according to records obtained by VTDigger.

Department of Vermont Health Access workers flagged it as a “major issue” for their boss, Kristine Fortier, a business application support specialist for the department.

Similar incidents also occurred on Nov. 17 and 18, and later on multiple days in December.

Department of Vermont Health Access staff members appeared alarmed at the issues, and IT staff escalated the tickets to “URGENT.”

“YIKES,” wrote a staff member Brittney Richardson. While the people affected were notified, the data breaches were never made public.

State workers pressed OptumInsights, a national health care tech company that hosts and manages Vermont Health Connect, for answers. The state has contracted with the company since 2014. It has paid about $11 million a year for the past four years for maintenance and operations, with more added in “discretionary funds.”

Optum appeared unable to figure out the glitch. “It is hard to find root cause of issue,” wrote Yogi Singh, service delivery manager for Optum on Dec. 10. Optum representatives referred comments on the issues to the state.

By Dec. 14, Grant Steffens, IT manager for the department, raised the alarm. “I’m concerned on the growing number of these reports,” he wrote in an email to Optum.

The company halted the creation of new accounts on Dec, 14, and shut down the site entirely on Dec, 22 to install a temporary fix. “It’s a very complex interplay of many many pieces of software on the back end,” said Darin Prail, agency director of digital services. The complexity made it challenging to identify the problem, and to fix it without introducing any new issues, he said.

In spite of the fixes, a caller reported a similar incident on Jan. 13.

On Feb. 8, a mother logged in to find that she could see her daughter’s information. When she logged into her daughter’s account, the insurance information had been replaced by her own.

“Very weird,” the mother wrote in an emailed complaint.

Optum completed a permanent fix on Feb. 17, according to Prail. Vermont Health Connect has not had a problem since, he said.

Prail said the state had reported the issues to the Centers for Medicaid and Medicare Services as required, and had undergone a regular audit in February that had no findings. The state “persistently pressured Optum to determine the root cause and correct the issue expeditiously but at the same time, cautiously, so as to not introduce additional issues/problems,” he wrote in an email to VTDigger.

“We take reported issues like this very seriously,” he said.

A history of glitches

The state’s health exchange has been replete with problems, including significant security issues and privacy violations, since it was built in 2012 at a cost of $200 million.

The state fired its first contractor, CGI Technology Systems, in 2014. A subcontractor, Exeter, went out of business in 2015. Optum took over for CGI, and continued to provide maintenance and tech support for the system.

Don Turner
Don Turner, right, then the House minority leader, speaks in 2016 about the need to fix the state’s glitch-ridden Vermont Health Connect website. With him are Phil Scott, left, then the lieutenant governor, and Sen. Joe Benning. Photo by Erin Mansfield/VTDigger

In 2018, when Vermont Health Connect was less than 6 years old, a report dubbed the exchange outdated and “obsolete.”

Officials reported similar privacy breaches in 2013, when Vermonters saw other people’s information.

An auditor’s report in 2016 found a slew of cybersecurity flaws, and officials raised concerns again during a  2018 email breach.

It wasn’t the first time that Vermont Health Connect users had been able to view other people’s personal information. Three times since October 2019, individuals had logged in to see another individual’s insurance documents. Prail attributed those incidents to human error, not to system glitch; a staff member uploaded documents to the wrong site, he said.

In spite of the issues, Prail said he and other state officials have been happy with Optum. After years of technical challenges with Vermont Health Connect, “Optum has really picked up the ball and improved it and been running it pretty well,” he said.

Glitches are inevitable, he added, and Optum has addressed them quickly. “They took a really difficult-to-manage site and made it work pretty well,” he said. “Optum is generally quite responsive to any issues we have.”

“I find any privacy breach to be concerning,” said Scott Carbee, chief information security officer for the state. He noted that the state uses “hundreds of software systems.” “While the scope of the breaches can be mitigated, true prevention is a difficult task,” he wrote in an email to VTDigger.

Optum spokesperson Gwen Moore Holliday referred comments to the state, but said the company was “honored” to work with Vermont Health Connect “to support the health care needs of Vermont residents.”

Prail said the Agency of Human Services had no plans to halt its contract with the company. “I don’t have a complaint about Optum,” he said. “They took a really difficult-to-manage site and made it work pretty well.”

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Health Care

Tags: data breaches, Optum, Vermont Health Connect

Katie Jickling

About Katie

Katie Jickling covers health care for VTDigger. She previously reported on Burlington city politics for Seven Days. She has freelanced and interned for half a dozen news organizations, including Vermont Public Radio, the Valley News, Northern Woodlands, Eating Well magazine and the Herald of Randolph. She is a graduate of Hamilton College and a native of Brookfield.