SCOTUS Shields Funds From Some Investor Suits: Delaware Brief

SCOTUS Shields Funds From Some Lawsuits

Photographer: Kevin Dietsch/Getty Image

The Supreme Court shielded funds from some investor lawsuits, ruling that the 1940 Investment Company Act doesn’t authorize shareholders to sue over bylaws and management decisions, Greg Stohr reports.

Voting 6-3 along ideological lines, the justices blocked activist investors from suing 11 closed-end funds. The investors were seeking more control over the funds. The high court said the law doesn’t authorize private lawsuits for most violations, leaving enforcement to the SEC. The ruling reverses a federal appeals court decision that had said the law contained a so-called private right of action letting investors ...