Attorney advertisingBriefSecurities & Shareholder
Supreme Court: no private suits under Investment Company Act Section 47(b)
Responsible attorney: Lou Schwartz, Schwartz & Associates, PC, Atlanta, Georgia. intake@snalawyers.com
In FS Credit Opportunities Corp. v. Saba Capital Master Fund, the Court ruled 6-3 that Section 47(b) of the Investment Company Act does not give private parties an implied right to sue to rescind contracts that allegedly violate the Act. The case arose from an activist investor's challenge to closed-end funds' use of control-share provisions that limit large holders' voting rights.
Why it matters. Closed-end fund shareholders lose a federal path for undoing fund governance measures such as control-share provisions.
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