Securities
Jul. 13, 2026
Supreme Court bars implied private right of action under Investment Company Act
The ruling delivers a significant victory for the registered investment industry, sharply limiting the ability of activist shareholders to challenge anti-takeover voting measures.
In a significant win for the registered investment industry, the United States Supreme Court held that the principal law that governs mutual funds and other investment companies does not permit activist shareholders to sue to void anti-takeover voting measures. In FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd., the Supreme Court held in a 6-3 decision that Section 47(b) of the Investment Company Act of 1940 (ICA) did not create an implied private right...
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