In a 6–3 decision authored by Justice Barrett, the Supreme Court held that Section 47(b) of the Investment Company Act does not create an implied private right of action for rescission of contracts that allegedly violate the Act, reversing the Second Circuit.
The Court reasoned that Section 47(b) is directed at courts’ remedial authority, not at conferring individual rights, and that the ICA’s comprehensive SEC enforcement scheme and two express private causes of action foreclose additional implied remedies.
The ruling directly limits the ability of activist investors — such as Saba Capital, which had used the provision to challenge closed-end fund anti-takeover provisions — to weaponize the ICA in securities litigation.
Read: 24-345_i42k.pdf