SCOTUS Closes Door for Suits Against Some Funds: Delaware Brief

Closed-End Funds in Calmer Waters

Activist investors will be looking for other ways to get into court after the Supreme Court closed off a major avenue to sue closed-end funds, Martina Barash reports.

More suits for breach of fiduciary duty will likely arise, after the high court ruled June 11 that private parties can’t sue to enforce most provisions of the 1940 Investment Company Act. That power belongs exclusively to the SEC, the justices said.

Activist investors such as Saba “can still bring the types of governance-related claims they are fond of where they belong—in state court,” ...