June 2010 - All persons who, during the period from July 30, 1999 to November 24, 2003, inclusive, purchased, owned or held shares in certain mutual funds in the Invesco/AIM family of mutual funds listed below (the “Invesco/AIM Funds” or “Funds”); (ii) all persons who were participants in or beneficiaries of the Amvescap 401(k) Plan during the period from July 31, 1999 to November 24, 2003, inclusive, and whose accounts included investments in the Invesco/AIM Funds; and (iii) current shareholders of the Invesco/AIM Funds.

The proposed Settlements collectively provide for payment of $20,455,400 in cash (the “Settlement Fund”), plus interest earned on the Settlement Fund (the “Gross Settlement Fund”), comprised of (i) $9,750,000 paid on behalf of the Invesco/AIM Advisor Defendants, (ii) $3,882,400 paid on behalf of Banc of America Securities LLC and related entities (“BAS”), (iii) $1,078,000 paid on behalf of the Bear Stearns Defendants, and (iv) $5,745,000 paid on behalf of the Canary Defendants. In addition to these amounts, Investor Class Lead Counsel intends to distribute to the Investor Class $11,490,000 plus interest, which was obtained by the Office of the New York Attorney General (“OAG”) in its settlement with the Canary Defendants. 

According to an article dated April 7, 2008, Invesco Ltd. settled for $9.8 million a putative shareholder class action complaint and a derivative complaint that were filed against it in a consolidated lawsuit pending with the U.S. District Court for the District of Maryland, according to the company’s Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended DAs summarized by the Company’s FORM 10-Q for the quarterly period ended September 30, 2007, following the industry-wide investigation by the SEC, the New York Attorney General’s Office and other regulators, into potential market timing activity in mutual funds, multiple lawsuits based on market timing allegations were filed against various parties affiliated with Invesco. These lawsuits were consolidated in the United States District Court for the District of Maryland, together with market timing lawsuits brought against affiliates of other mutual fund companies, and three amended complaints were filed against company-affiliated parties: (1) a putative shareholder class action complaint brought on behalf of shareholders of AIM funds formerly advised by Invesco Funds Group, Inc.; (2) a derivative complaint purportedly brought on behalf of certain AIM funds (including certain funds formerly advised by Invesco Funds Group, Inc.) and such fund registrants; and (3) an ERISA complaint purportedly brought on behalf of participants in the company’s 401(k) plan. On March 1, 2006, the court entered orders dismissing certain claims asserted against company-related defendants in the shareholder class action and derivative lawsuits but preserving claims under Section 10(b) of the Exchange Act and Section 36(b) of the Investment Company Act of 1940, as amended. On September 15, 2006, the court dismissed the ERISA lawsuit with prejudice. The plaintiff has appealed that dismissal to the United States Court of Appeals for the Fourth Circuit.

In March 2004, the case was transferred from the U.S. District Court for the District of Colorado to the U.S. District Court for the District of Maryland. The case is being handled in Multidistrict Litigation under, In re Mutual Funds Investment Litigation, case number 04-MD-15864.

On September 30, 2004, a Consolidated Amended Class Action Complaint was filed.

The complaint alleges violations of the Securities Act of 1933, the Securities Exchange Act of 1934, among other claims, and for common law breach of fiduciary duties. The Complaint alleges that during the Class Period the defendants engaged in illegal and improper trading practices, in concert with certain institutional traders, which caused financial injury to the shareholders of the INVESCO Mutual Funds. According to the Complaint, the Defendants surreptitiously permitted certain favored investors, including Canary and the Doe Defendants, to illegally engage in ‘timing’ of the INVESCO Mutual Funds whereby these favored investors were permitted to conduct short-term, ‘in and out’ trading of mutual fund shares, despite explicit restrictions on such activity in the INVESCO Mutual Funds’ prospectuses. Specifically, the Complaint alleges that defendants violated Sections 11 and 15 of the Securities Act of 1933; Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder; and Section 206 of the Investment Advisers Act of 1940. The Complaint alleges that late trading and timing practices injure ordinary mutual fund investors, who are not allowed to engage in such practices, and are acknowledged as improper practices by the Funds. The Complaint alleges that these practices were undisclosed in the prospectuses of the Funds, which falsely represented that the Funds actively police against timing and represented that post 4 P.M. EST trades will be priced based on the next day’s net asset value and that premature redemptions will be assessed a charge.

Summary of Allegations: The complaint in this litigation alleges that Invesco and certain of its senior executives were aware of, engaged in and facilitated “timing” trades in the Invesco Funds: a money-making act involving short-term trading in and out of a mutual fund. The technique is designed to exploit inefficiencies in the way mutual fund companies price their shares by allowing certain customers to trade shares at distorted prices that no longer reflect the true value of the fund. As a result, those few customers permitted to engage in market timing typically reap huge profits, the cost of which is borne primarily by the long-term investors in the relevant fund.

The public filings issued by the Defendants assured investors that Invesco discouraged mutual fund timing, expressly limiting investors to “four exchanges out of each Fund per twelve-month period” and that “[e]ach Fund reserves the right to reject any exchange request, or to modify or terminate the exchange policy, if it is in the best interests of the Fund.” In reality, however, the Defendants not only routinely entered into timing arrangements with various select investors, they developed formal policies for approving and monitoring these arrangements, which were referred to at Invesco as “Special Situations.” Pursuant to Invesco’s “Special Situations,” dozens of select investors were exempted from the company’s written policy of allowing only four exchanges out of funds in a twelve-month period. Defendants kept the Special Situations program secret by prohibiting any documentation of the timing arrangements and concealing the program’s existence from investors. On December 2, 2003, the Securities and Exchange Commission (”SEC”) and the Office of the New York Attorney General filed complaints against Invesco and Raymond Cunningham, President and Chief Executive Officer of Invesco, alleging that they permitted certain investors to trade billions of dollars in and out of the Invesco Funds. The SEC and New York State investigations uncovered that dozens of select investors in the Invesco funds were permitted to market time. In fact, the investigations concluded that “Invesco’s senior management approved and institutionalized these arrangements until Invesco became a center for fund timers, who pumped billions of dollars of timing trades through its funds.” Invesco agreed to a cease and desist order with the SEC, New York Attorney General and Colorado Attorney General as a result of the market timing conduct at issue.

Defendants were acutely aware of the detriment market timing had on the legitimate shareholders. For example, an internal Invesco study acknowledged that the timing activity hurts the funds other investors, diluting the value of their shares to underwrite the spectacular returns enjoyed by Canary and the other “Special Situations” Invesco had allowed into the funds. According to the study, Invesco funds with “heavy timing flows” produced returns between .75% and 1% lower than non-timed funds. In an internal February 12, 2003 e-mail, defendant Timothy Miller acknowledged that timing activity was “costing our legitimate shareholders significant performance.”

Further, a January 15, 2003 Memorandum from Jim Lummanick, Invesco’s Chief Compliance Officer, to Raymond Cunningham, Invesco’s CEO and COO, admitted, among other things, that illegal trading: (1) “has a negative impact on performance” because portfolio managers increase their use of cash to deal with large exchanges; (2) causes “negative tax consequences,” which “adds insult to injury for long-term shareholders, since they suffer potentially lower returns and an extra tax burden;” (3) distort the investment style of mutual funds in order to accommodate illegal trading; and (4) the high volume of activity increases the risk that portfolio managers will make errors. Nevertheless, Defendants continued to engage in “Special Situations” with select customers and actively encouraged market timing of the Invesco Funds. As further alleged in the complaint, various brokers and financial institutions also participated in the market timing schemes, to the detriment of ordinary investors.

In addition to the profits from their market timing, according to the New York State investigation, Invesco also made illegal gains by charging ordinary investors in excess of $160 million in management fees while breaching their fiduciary duties to those very same investors. None of the above detailed material information was disclosed to the members of the Class during the Class Period.

The Funds, and the symbols for the respective Funds named in the complaint, are as follows:

INVESCO Advantage Health Sciences Fund (Sym: IAGHX, IGHBX, IGHCX); INVESCO Advantage Fund (Sym: IADAX, IADBX, IADCX); INVESCO Latin American Growth Fund (Sym: IVSLX); INVESCO Core Equity Fund (Sym: ICEAX, ICEBX, IINCX, FIIIX, IEIKX); INVESCO Dynamics Fund (Sym: IDYAX, IDYBX, IFDCX, FIDYX, IDYKX); INVESCO Energy Fund (Sym: IENAX, IENBX, IEFCX, FSTEX, IENKX); INVESCO Financial Services Fund (Sym: IFSAX, IFSBX, IFSCX, FSFSX, FSFKX); INVESCO Gold & Precious Metals Fund (Sym: IGDAX, IGDBX, IGDCX, FGLDX); INVESCO Health Sciences Fund (Sym: IAHSX, IBHSX, IHSCX, FHLSX, IHSKX); INVESCO International Core Equity Fund (formerly known as International Blue Chip Value Fund) (Sym: IBVAX, IBVBX, IBVCX, IIBCX); INVESCO Leisure Fund (Sym: ILSAX, LSBX, IVLCX, FLISX, ILEKX); INVESCO Mid-Cap Growth Fund (Sym: IMGAX, IMGBX, IMGCX, IVMIX); INVESCO Multi-Sector Fund (Sym: IAMSX, IBMSX, ICMSX, ICMSX); AIM INVESCO S&P Index Fund (Sym: ISPIX); INVESCO Small Company Growth Fund(Sym: ISGAX, ISGBX, ISGCX FIEGX ISCKX); INVESCO Technology Fund (Sym: ITYAX, ITYBX, ITHCX, FTCHX, ITHKX); INVESCO Total Return Fund(Sym: IATRX, IBTRX, ITRCX, FSFLX); INVESCO Utilities Fund(Sym: IAUTX, IBUTX, IUTCX, ISTUX); AIM INVESCO Cash Reserves Fund (currently known as AIM Money Market Fund) (New symbol: AIMXX); AIM INVESCO Tax-Free Money Fund (Sym: FFRXX); AIM INVESCO Treasurers Money Market Reserve Fund (Sym: IMRXX); AIM INVESCO Treasurers Tax-Exempt Reserve Fund (Sym: ITTXX); AIM INVESCO US Government Money Fund (Sym: FUGXX); INVESCO Advantage Fund (Sym: IADAX, IADBX, IADCX); INVESCO Balanced Fund (Sym: IBLAX, IBLBX, IBNCX, IBFIX, IMABX, IBLKX); INVESCO European Fund (Sym: IEUAX, IEUBX, FEURX, IEUKX); INVESCO Growth Fund (Sym: IAGWX, IBGWX, IBGCX, FLRFX, IGWKX); INVESCO High-Yield Fund (Sym: IAHYX, IBHYX, IHYCX FHYPX., IHYKX); INVESCO Growth & Income Fund, (Sym: IGIAX, IGIBX, IGRCX, IVGIX, IGIKX); INVESCO Real Estate Opportunity Fund (Sym: IAREX, IBREX, IRECX, IVSRX); INVESCO Select Income Fund (Sym: IASIX, IBSIX, ISICX, FBDSX); INVESCO Tax-Free Bond Fund (Sym: IXBAX, IXBBX, ITFCX, FTIFX); INVESCO Telecommunications Fund (Sym: ITLAX, ITLBX, INTCX, ISWCX, ITEKX); INVESCO U.S. Government Securities Fund (Sym :IGVAX, IGVBX, IUGCX, FBDGX); INVESCO Value Fund (Sym: IAVEX, IBVEX, IVACX, FSEQX)