The US Supreme Court closed off a major avenue for shareholders to sue closed-end funds, meaning activist investors will be looking for other ways to get into court.
More suits for breach of fiduciary duty will likely arise in fights for control of this type of investment fund, 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 Securities and Exchange Commission, the justices said in FS Credit Opportunities Corp. v. Saba Capital Master Fund Ltd.
Activist investors such as Saba “can ...
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