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Cornerstone Progressive Return Fund’s (CFP) Board of Directors, hoping no one would notice, issued a press release on Saturday morning (February 13, 2010, 9.57 am EST) over a long holiday weekend, announcing that it would be slashing its monthly distribution in-half. The monthly return-of-capital distribution per share would go from $0.205 to $0.1025 per share for the months of April, June and July.

Pre-Announcement Trading: The aggregate trading volume two days prior to the announcement (2/11/10 & 2/12/10) surged to 1,154,100 shares with a concomitant share price plunge of 15.7%. (CFP went ex-dividend on 2/10/10.) The average two day trading volume for those days was almost 600,000 shares versus a 3 month average of 167,097 shares.

Likely Source of Selling: It’s likely that Doliver Capital, LLC, CFP’s largest shareholder, was a seller on those two high volume days as it would have been unlikely to find that much stock to “short”. Month-end SEC reporting will elucidate us on this point.

For Those Investors Still Owing CFP: You haven’t been paying attention. Here are hyperlinks to the following reports regarding the lack of investment merits of CFP:

Disclosure: None

Source: Cornerstone Progressive Return Fund Stealthily Slashes Monthly Distribution