United States: Supreme Court Scissors up Saba’s Rescission Argument Under Section 47(b) of the 1940 Act
By: Thoreau A. Bartmann, Varu Chilakamarri, Jennifer R. Gonzalez, Charles M. Ponder, and Steve Topetzes
Background
The Supreme Court agreed to hear FS Credit Opportunities Corp., et al. v. Saba Capital Master fund, et al. to resolve whether Section 47(b) of the Investment Company Act of 1940 (Act) allows private parties to bring lawsuits against registered investment companies to rescind contracts (including corporate bylaws) that allegedly violate the Act.
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