U.S. Supreme Court,
Securities
Jun. 29, 2026
Activist shut out at the gate in Supreme Court win for closed-end funds
In FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd., the Supreme Court ruled that Section 47(b) of the Investment Company Act does not allow private lawsuits, sharply limiting activist investors' ability to challenge closed-end fund governance in court.
Timothy D. Reynolds
Partner
Paul Hastings LLP
Phone: (213) 683-6000
D. Scott Carlton
Of Counsel
Paul Hastings LLP
515 S Flower St
Los Angeles , CA 90071
Phone: 213-683-6113
On June 11, 2026, the Supreme Court issued its decision in FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd., a closely watched case concerning activist litigation against closed-end funds. In a 6-3 decision, the Court held that Section 47(b) of the Investment Company Act of 1940 (ICA) does not create a private right of action allowing investors to seek rescission of contracts, bylaws, voting restrictions or other arrangements that allegedly violate the I...
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