Saba Tells Justices It Can Sue Over Fund Control Provisions

A Great Depression-era law allows litigation to undo investment fund provisions that violate the statute, activist investor Saba Capital Master Fund Ltd. told the US Supreme Court.

Private parties have a right to sue for rescission under the Investment Company Act of 1940, Boaz Weinstein’s hedge fund said in a brief Thursday. That principle received confirmation in a 1979 Supreme Court case on an analogous section of the Investment Advisers Act and subsequent changes to the ICA, Saba said.

Saba’s brief responds to a group of closed-end funds, including FS Credit Opportunities Corp. and two BlackRock entities, that are seeking ...