A class action has been brought in the Eastern District of New York on behalf of all purchasers of Capstead Mortgage Corp. (NYSE:CMO) between March 9, 1997 and June 26, 1998, inclusive (the "Class Period"). The complaint alleges that despite defendants' assurances that lower interest rates were a boon for Capstead's investment portfolio, and that the Company expected the common dividend to remain steady or increase for the remainder of 1998, the Company announced on June 26, 1998 that impairment charges and restructuring losses for the second quarter would reach $255 million and that the third quarter dividend would be considerably lower than previously indicated. Capstead common stock closed on June 26, 1998 at 9 5/16 on extraordinarily heavy trading, down over 60% from its Class Period high of 25 3/8.

Update

On March 31, 2003, the court dismissed this case in its entirety.

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