News & Events

Partner Ken Burdon was quoted in a BoardIQ article titled, "Activists: Industry Groups Are 'Dead Wrong' in '40 Act Read," which discussed Saba Capital Management’s arguments to the U.S. Supreme Court in support of their contention that a private right of action exists under Section 47(b) of the Investment Company Act for private parties to sue funds in federal court to void fund contracts that allegedly violate the Investment Company Act.

The case, set to be heard in December 2025, is of critical importance given its potential to incentivize litigation that could destabilize the regulatory structure for the multi-trillion-dollar funds industry if Saba prevails. Ken explains how the current composition of the Court is more likely to hew closely to the statutory text of the Investment Company Act, which should support a finding against Saba that no private right of action exists under Section 47(b). Ken also notes that the arguments that Saba and its supporters are making to the Court involving the merits of private versus SEC enforcement of the Investment Company Act, economic considerations around market discipline, and analogies to the development of state securities laws are all "somewhat irrelevant" to the true legal question - which is whether Congress provided for a private right of action in Section 47(b).

To read the full article, please click here (subscription required).